Rate cycles shift. However, the pressure on trust companies and trust departments of banks to protect their customers’ cash balances does not.
In the second quarter of 2026, total domestic deposits grew for the eighth consecutive quarter, up $142.7 billion. The growth came entirely from uninsured balances. Uninsured deposits rose $317.4 billion, while insured deposits declined 1.0%, or about $114 billion (FDIC, Quarterly Banking Profile, Q2 2026).
Q2 2026: Deposit Growth Went Uninsured
Quarterly change in domestic deposits, Q1 to Q2 2026
Across the Rate Cycle, the Exposure Remains
Depositor behavior often corresponds to the Federal Reserve rate cycle. When the Fed pushed its target to a 2023 peak of 5.25-5.50%, rate-sensitive balances chased rates into brokered channels and money market funds. When the Fed cut rates through 2024 and 2025, the flows shifted again. In September 2026, the Fed raised rates once more, and the flows will likely follow.
Through it all, one fact remains constant. Large trust company customer balances above the $250,000 deposit insurance limit remain uninsured unless the institution acts. Q2 2026 data show uninsured deposits continuing to grow.
The Rate Cycle Keeps Turning
Federal funds target range (upper bound), quarter-end, 2022-2026
Alternatives to Money Market Funds
Many trust companies and banks with trust departments rely on money market funds (MMFs) for investing fiduciary cash. MMFs are familiar and easy to administer, but some carry NAV and liquidity-fee risk, and they leave the insured-versus-uninsured question unanswered.
Cash sweep programs offer same-day liquidity and competitive rates while also providing trust customers with access to expanded FDIC deposit insurance on their funds. (For the full money-fund comparison across rate environments, see Trust Company Cash in a Shifting Rate Cycle.)
Each rate cycle teaches the same lesson. When rates rise, brokered deposits and money funds draw attention. When the cycle turns, or stress appears, insured balances regain priority. With uninsured deposits driving industry deposit growth, insured cash positions stand out as stable, defensible funding.
R&T Deposit Solutions for Trust Companies
The Demand Deposit Marketplace® (DDM®) program helps trust companies manage their customers’ cash and gives their customers access to expanded FDIC deposit insurance coverage, without relying on money funds.
For trust companies, R&T’s solutions provide:
R&T integrates with more than 50 core processors, so a trust company can adopt an insured cash program without disruption. Portals, APIs, and data-exchange tools give trust officers real-time visibility into balances, transactions, and reporting, without manual workarounds.
FDIC-insured cash sweep programs address a trust company’s pressure to protect their customer relationships, help them meet fiduciary obligations3, and generate consistent, predictable funding for the institution. Institutions that adopt these alternatives are better positioned for the next rate shift and for closer regulatory scrutiny of uninsured exposure. Banks with trust departments receive the same benefits.
1 Under the DDM program, funds are deposited into demand deposit accounts (DDAs) or money market deposit accounts (MMDAs) at receiving banks or share draft accounts or share accounts at receiving credit unions. While customers’ funds are held in MMDAs or share accounts, the return of the customers’ funds from the DDM program may be delayed as, under federal regulations, the receiving institution is permitted to impose a delay of up to seven days on any withdrawal request from an MMDA or share account.
2 While interest rates obtained on funds placed at receiving institutions under the DDM program may, under certain circumstances, outperform cash alternatives, such as money market funds, the primary objective of the DDM program is to provide customers with convenient access to expanded deposit insurance coverage on their funds (and not for investment enhancements or higher rates of returns or profits).
3 R&T does not act in a fiduciary or trustee capacity with respect to the DDM program (the “Program”) and makes no representations or warranties that the Program satisfies any investment policy or other requirements for participating institutions. R&T does not represent that the Program enables participating institutions to meet their own fiduciary or other obligations or duties. Participating institutions are solely responsible for complying with all such policies and requirements, as well as any other applicable laws or regulations governing the deposit of specific types of funds into the Program (e.g., qualified retirement funds, free credit balances of brokerage institutions, escrow funds). R&T makes no representations or warranties that the Program complies with any such laws, except to the extent expressly set forth in the written agreements entered into between R&T and the participating institution.