Calculate the credit-deposit ratio from total advances and total deposits to assess a bank’s lending-to-deposit balance for banking analysis.
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CD Ratio Formula
The CD ratio, or credit-deposit ratio, compares a bank’s total advances to its total deposits. The calculator shows the decimal ratio and its percentage equivalent; use totals with the same reporting date, scope, currency and amount scale.
The percentage shown is the decimal ratio multiplied by 100.
- CDR = credit-deposit ratio in decimal form
- CDR% = credit-deposit ratio as a percentage
- A = total advances, or total loans and credit extended
- D = total deposits
The calculator divides total advances by total deposits. If total advances are 800,000 and total deposits are 1,000,000, the CD ratio is 0.8. As a percentage, that is 80%.
Reset clears the entered totals, result and saved calculation. Expand Calculation details to see the entered values and division.
CD Ratio Result Guide
The table illustrates arithmetic relationships only; its bands are not regulatory targets or bank safety ratings. Interpretation depends on funding structure, liquidity, reporting scope and period.
| CD Ratio | Percentage Form | Arithmetic Interpretation |
|---|---|---|
| Below 0.60 | Below 60% | Advances are less than 60% of deposits |
| 0.60 to 0.80 | 60% to 80% | Advances are 60% to 80% of deposits |
| Above 0.80 to 1.00 | Above 80% to 100% | Advances are greater than 80% and no more than 100% of deposits |
| Above 1.00 | Above 100% | Advances exceed deposits, which may indicate reliance on other funding sources |
Decimal to Percentage Conversion
| Decimal Ratio | Percentage |
|---|---|
| 0.5000 | 50% |
| 0.7500 | 75% |
| 0.9000 | 90% |
| 1.1000 | 110% |
Example
Example 1: Calculate the CD ratio from advances and deposits
Suppose total advances are $750,000 and total deposits are $1,000,000.
The CD ratio is 0.7500, or 75%.
Example 2: Advances exceed deposits
Suppose total advances are $1,250,000 and total deposits are $1,000,000.
The CD ratio is 1.2500, or 125%.
FAQ
What is a CD ratio?
A CD ratio is the credit-deposit ratio. It compares total advances or loans with total deposits; it does not trace the use of individual deposits. A ratio of 0.80 means advances equal 80% of deposits.
Is a higher CD ratio always better?
Not always. A higher CD ratio can show that deposits are being actively used for lending, which may support income. However, a very high ratio can also point to liquidity pressure because more funds are tied up in advances.
Why can total deposits not be zero?
The formula divides total advances by total deposits. Division by zero is not possible, so the calculator requires deposits to be greater than zero.
