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SCHW · Forward model · Bank deposit account fees

What has to happen in Bank deposit account fees

Model as of

This page changes Bank deposit account fees inside the complete SCHW model. Every other vertical, corporate programme and valuation assumption stays in the selected portfolio case.

SCHW forward model
Horizon
Consolidated fair value $104.30 all other verticals held in this portfolio case
Final-quarter revenue $129M 1% of company revenue
Explicit segment contribution $1.75B EBITDA less segment capex, before corporate items

Bank deposit account fees

Basis quarter$333M
Final quarter$129M
Implied CAGR−17%
Final revenue mix1%

Fees on the legacy TD Ameritrade insured-deposit arrangement: $70.6B of balances at quarter end against $82.1B a year earlier, 85% of them designated fixed-rate and 15% floating. 4.7% of the basis quarter and the only line whose volume and price move in opposite directions - balances fell 14% year on year while the fee rate rose 35%, because the average net yield on the fixed-rate tranche re-priced upward as older tranches rolled off. It is a melting ice cube with a warming surface, and the balance leg is the one this model trusts: the run-off is contractual, the yield lift is not.

Last four quarters
2025 Q3 $247M Reported
2025 Q4 $238M Reported
2026 Q1 $295M Reported
2026 Q2 $333M Reported
Fixed-rate bank deposit account obligation (85% of balances)Floating-rate bank deposit account obligation (15% of balances)
Capacity energised 72050000000 $M of average bank deposit account balances at the basis quarter ($73.5B at 2026 Q1 + $70.6B at 2026 Q2) / 2. Schwab prints period-end BDA balances, never averages.
Capacity added -2900000000 $M of average bank deposit account balances/qtr changing −3.0% per quarter -$2.9B a quarter. The four observed sequential declines average -$2.875B; the run-off is contractual.
Utilisation 100% gliding toward 100% 100%: the whole insured-deposit balance earns the arrangement's net yield. No idle balance concept.
Revenue per $M of average bank deposit account balances $0/qtr drifting 0.0% per quarter $333M / $72,050M = 0.4622% a quarter, 1.85% annualised, against 1.19% annualised a year earlier.
Bank deposit account fees

Latest: $129M (2031Q2E)

Period Value
2021Q4 $304M
2022Q1 $294M
2022Q2 $352M
2022Q3 $413M
2022Q4 $350M
2023Q1 $151M
2023Q2 $175M
2023Q3 $205M
2023Q4 $174M
2024Q1 $183M
2024Q2 $153M
2024Q3 $152M
2024Q4 $241M
2025Q1 $245M
2025Q2 $247M
2025Q3 $247M
2025Q4 $238M
2026Q1 $295M
2026Q2 $333M
2026Q3E $320M
2026Q4E $307M
2027Q1E $294M
2027Q2E $282M
2027Q3E $270M
2027Q4E $258M
2028Q1E $247M
2028Q2E $236M
2028Q3E $226M
2028Q4E $216M
2029Q1E $206M
2029Q2E $196M
2029Q3E $187M
2029Q4E $178M
2030Q1E $169M
2030Q2E $161M
2030Q3E $152M
2030Q4E $144M
2031Q1E $137M
2031Q2E $129M

Assumptions & reasoning

  • A CAPACITY driver on a DECLINING base, and the first negative capacity addition in this repository. Both legs are disclosed - quarter-end balances every quarter and the fee itself - and the run-off is the disclosed fact the driver carries rather than a growth assumption in reverse.
  • ASEASONAL: centred-moving-average factors of [0.9223, 0.9608, 1.0547, 1.0621], a signal of 0.1398 against a worst window-to-window spread of 0.4500 - a 0.31:1 ratio, the weakest in the set. The 2023 Q1 window ratio of 0.613 is the contractual repricing of the arrangement, not a first-quarter effect.
  • This line falls from $333M to about $129M a quarter by 2031 Q2 in the base case - 1.4% of terminal revenue. Getting it wrong cannot move the valuation, and pretending it is stable would be the larger error.
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