They chose to. They didn’t need to. If they were getting too many deposits, they could lower the interest they paid on them. The problem is they bought a bun

They chose to. They didn’t need to. If they were getting too many deposits, they could lower the interest they paid on them. The problem is they bought a bunch of long dates securities yielding 1.5-2% and when the deposits flooded in they started paying more than 1.5-2%. They have been better off buying T bills or something else without duration risk and paying something less than Fed Funds. This is what most banks do.