Uninsured deposits are deposit balances that are not covered by applicable deposit insurance. Under U.S. banking law, the term generally refers to the amount of a depositor's deposits at an insured institution that exceeds the amount of insured deposits for that depositor.
For investors, uninsured deposits matter because depositors with balances at risk of loss can have stronger incentives to move funds when they become concerned about a bank's condition.
Reported uninsured deposits are estimates
The FDIC's Quarterly Banking Profile notes that larger institutions report estimated uninsured deposits and that the FDIC estimates the amount for institutions that do not report it directly. The calculation therefore should not be interpreted as a perfect account-by-account measure of runnable funding.
Bank disclosures can also contain adjustments or supplemental views for:
- affiliate deposits;
- collateralized public deposits;
- reciprocal deposits;
- internal operating accounts; and
- other balances that management believes change the economic interpretation.
Those adjusted measures are not automatically comparable across banks.
A percentage can be more useful than a dollar amount
A basic ratio is:
Uninsured deposit ratio = Estimated uninsured deposits ÷ Total deposits
Suppose a bank has $4 billion of estimated uninsured deposits and $20 billion of total deposits. Its uninsured deposit ratio is 20%.
That ratio still does not measure the bank's complete liquidity risk. An institution can hold substantial cash, securities, borrowing capacity, collateralized deposits, or other liquidity sources. Conversely, insured deposits can also leave.
Uninsured does not mean immediately unstable
An uninsured deposit can belong to a long-standing operating customer with a deep banking relationship. A fully insured deposit can still move quickly for rate or service reasons. The insured status is therefore one funding-risk dimension, not a behavioral forecast.
Investors often evaluate uninsured deposits alongside:
- cash and borrowing capacity;
- deposit concentration;
- noninterest-bearing deposit share;
- Cost of Deposits;
- Deposit Beta; and
- securities and loan liquidity.
Example of definition risk
A bank may disclose regulatory uninsured deposits of $9 billion, then present a lower adjusted amount after excluding collateralized public funds or affiliate balances. Both figures may be useful, but the analyst should label the adjustment rather than silently replacing the regulatory number.
Sources
- FDIC Federal Deposit Insurance Act definitions
- FDIC Quarterly Banking Profile, Q1 2026
- Webster Financial 2025 Form 10-K
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