FDIC raises business deposit limits: New opportunities for commercial banks

Commercial banks in the US just received an unexpected gift from regulators: business deposit limits have been significantly relaxed, allowing banks to expand relationships with corporate customers without worrying about exceeding deposit insurance thresholds.

New rule: From $5 billion to $30 billion

On August 27, 2026, the FDIC (Federal Deposit Insurance Corporation) issued its final rule on reciprocal deposits, effective September 1, 2026. The biggest change: the limit on reciprocal deposits that qualifying banks can accept under the statutory exception from brokered-deposit treatment increased from the lesser of $5 billion or 20% of total liabilities, up to a maximum of $30 billion.

The new calculation formula is more flexible:

• 50% of the first $1 billion in liabilities
• 40% of liabilities between $1 billion and $10 billion
• 30% of liabilities above $10 billion

This is the first time this limit has been adjusted since Congress enacted the Reciprocal Deposit Act in 2019.

How reciprocal deposits work

Reciprocal deposits allow a bank to distribute a large customer’s deposits (typically exceeding the $250,000 insurance limit) across multiple banks in a network, while the customer maintains a relationship with a single bank.

Example: A business needs to deposit $10 million for payroll and supplier payments. Instead of only $250,000 being insured at one bank, that bank can distribute the $10 million across 40 other banks ($250,000 each) and receive deposits from other banks in the network in return. The customer still works with a single bank, but the funds are fully insured.

Impact on business banking

The new rule is particularly important for commercial banking because business deposits don’t stand alone. A company keeping operating cash at a bank typically also uses that bank for:

• Collecting receivables
• Making supplier payments (payables)
• Processing payroll
• Managing liquidity
• Obtaining credit facilities

KeyCorp, a major US regional bank, reported that approximately 91% of its commercial loans were made to customers that also used the bank for deposits, payments, or capital markets services. At Regions, small business deposits accounted for just over 30% of the quarter-over-quarter growth in average noninterest-bearing deposits.

These relationships make operating deposits particularly valuable. A company keeping working cash at a bank tends to maintain a long-term relationship with that bank.

Opportunities for regional banks

The new rule particularly benefits regional banks competing with large banks (JPMorgan, Bank of America, Wells Fargo) for corporate deposits. Previously, the $5 billion or 20% of total liabilities limit forced many regional banks to decline additional deposits from large businesses, even when customers wanted to maintain the relationship.

With the new limit up to $30 billion, regional banks can:

• Accept additional deposits from small and medium businesses
• Provide more comprehensive treasury management services
• Compete more effectively with large banks
• Increase fee income (not just interest income from lending)

Lessons for the Vietnamese market

In Vietnam, a mechanism similar to reciprocal deposits doesn’t exist, but the need for deposit insurance for large businesses is real. Vietnam’s deposit insurance limit is currently only 125 million VND (about $5,000) — far lower than the $250,000 in the US.

Vietnamese businesses often have to spread deposits across multiple banks to get full insurance coverage, or accept the risk of uninsured amounts. This creates inconvenience and reduces liquidity management efficiency.

The lesson from the US: When regulators relax deposit limits, banks have more room to better serve businesses, and businesses have more options to optimize their banking relationships.

Lessons for the Japanese market

In Japan, regional banks (地方銀行) face similar challenges: competing with megabanks for corporate deposits. Japan’s deposit insurance limit is 10 million yen (about $67,000) per depositor, per bank.

The FDIC’s new rule could serve as a model for Japan to consider: Could regional banks be allowed to accept more corporate deposits through a similar risk-distribution mechanism?

However, Japanese financial culture is very conservative. Japanese businesses tend to maintain long-term relationships with a main bank (main bank system) and rarely switch banks. This makes attracting corporate deposits more difficult, even when limits are relaxed.

The future of business banking

The FDIC’s new rule is a step in the right direction, but it’s not the only solution. Commercial banks need to:

• Invest in treasury management and payments capabilities
• Provide better APIs for business integration
• Optimize user experience for corporate banking
• Build fintech partnerships to expand services

Deposits are just one part of the banking relationship. Banks that provide the most comprehensive services — from payments and liquidity management to financial advisory — will retain corporate customers long-term.

The FDIC has opened the door. Now it’s time for commercial banks to walk through it.

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Source: FDIC Deposit Rule Gives Banks More Room for Business Cash — PYMNTS, September 2026