Wholesale funding is proving a more attractive funding option for banks than retail deposits, with Bendigo and Adelaide Bank yesterday explaining its rationale for leaning towards wholesale money.Deposits increased less than two per cent over the year, less than one third the rate of growth for all banks.Richard Fennell, the bank's chief financial officer, said Bendigo aimed to keep deposit pricing "towards the bottom end of the competitive range", and would "work to keep deposit pricing in the bottom range."CEO Mike Hirst said the bank once more "has been holding its own, without resorting to price", to attract deposits and maintain lending volume.Fennell said the bank used mortgage-backed securities as its main wholesale funding option, "when we can be confident we can call all the notes we issue right down the trust structure at an appropriate price."Victoria Teachers Mutual Bank is another niche ADI with plans to fund above average growth from wholesale markets.Moody's Investors Service last week assigned, for the first time, a Baa1 long-term issuer rating and a Prime-2 short-term issuer rating to Victoria Teachers.William Wolke, chief executive of the bank, said Victoria Teachers would employ the rating "to issue our own paper, TCDs and access wholesales funding. It's useful for counterparty trading.""A lot of school boards and governing bodies use ratings as a proxy."Wolke said retail represented about 95 per cent of Victoria Teachers funding now - something Moody's labelled "deposit-rich". This may fall to 85 per cent to 90 per cent, Wolke said.In contrast to Bendigo's position on retail funding, Wolke said one principle was "fair pricing, for example, for deposits below $5000, we price from the first dollar."This pricing policy trimmed VTMB's net interest margin, Moody's said last week, thanks to "competitively priced products", although "it remains a healthy 2.3 per cent".AMP Bank also changed its preferred funding mix during the June half. Last week it disclosed that it supported the growth in its mortgage book with wholesale debt and was allowing its deposit book to run down.