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NEW YORK (TheStreet) -- U.S. consumers are finally starting to take a few steps out on the risk spectrum - taking money out of liquid deposits and placing them into longer-term or higher-yielding assets.

This is a good trend for big banks, which have been able to lock consumers into low-cost funding for a longer period of time, while collecting fees from the flood of money entering the bond market.

According to a report released this week by Market Rates Insight, deposit balances at U.S. banks declined for the first time in nearly two decades. During the period ended June 30, banks held $7.67 billion in deposits, the second quarterly decline from a peak of $7.7 billion at year-end. Those deposits had been on an upward trend since the first quarter of 1992, when balances stood at a mere $3.27 billion.

The reason? Declining rates.

Checking accounts, savings accounts and money-market accounts are all yielding just fractions of a percent - from 0.1% to 0.3% -- and fell further this week, according to . To get a rate above 1%, depositors must move into CDs that are at least one year in duration. data show that those rates have declined as well.

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As a result, after a couple years of cash-hoarding in safe, liquid products, investors are starting to demand more bang for their bucks - even if it means locking in their money for a longer period of time. Market Rates Insight data show that money flooded into long-term CDs last week, with two- and five-year deposits garnering 60% of those that repriced; the least amount of deposits that repriced went into three-month CDs. Similarly, money continued to flow into T-bills, with yield declining at a faster pace, the longer the duration.

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The trend has been helping big banks in one respect - deposits have become a lot less costly, while getting locked in for longer periods of time. The four largest U.S. banks, Bank of America (BAC) - Get Bank of America Corp Report (Stock Quote: BAC), JPMorgan Chase (Stock Quote: JPM) (JPM) - Get JPMorgan Chase & Co. Report , Wells Fargo (Stock Quote: WFC) (WFC) - Get Wells Fargo & Company Report and Citigroup (C) - Get Citigroup Inc. Report (Stock Quote: C), held $2.9 trillion in deposits at June 30, roughly flat from the year-ago period. But their interest expense on those deposits for the first half of 2010 was just $15.8 billion - down 18% or $3.5 billion from the same period last year.

Wells Fargo CFO Howard Atkins noted that the company's higher return on assets last quarter was driven in part by a higher proportion of low-cost checking and savings accounts, as Wells continued to wind down high-yielding CDs from Wachovia. Bank of America CEO Brian Moynihan also indicated that the company would replace some fee revenue, "obviously by the spread on deposits." But that stable source of cheap funding hasn't yet been boosting the equity markets. Instead, investors have been plunging funds into bonds - perhaps the highest-yielding "safe" investment out there.

According to the Investment Company Institute, about $94 billion has flowed into the bond market since the "flash crash" in May. About $52 billion has left the stock market and $25 billion or so flowed out of deposits. For now, investors are craving yield but still demanding some measure of protection - until the bond bubble meets some kind of pin prick.

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