Households and businesses continue to build up their deposits, while being reluctant to borrow. This is good news for financial institutions looking to increase their consumer and small business savings portfolios, but many are finding it difficult to manage the "hot money" flows in the deposit market.The latest Australian Prudential Regulation Authority monthly banking statistics, released yesterday, show that total household deposits grew by 8.7 per cent over the 12 months to April and 1.7 per cent over the three months to April. Mortgage lending books increased by 7.6 per cent over the 12 months and 1.5 per cent over the three months to April.Business deposits grew by 13.2 per cent over the 12 months to April and one per cent over the three months. Business loan books increased by 0.8 per cent over the 12 months to April and 1.6 per cent over the three months.There were marked variations in the deposit flows to different financial institutions.The two big retail banks - Commonwealth and Westpac - were off the pace. Commonwealth Bank (including Bankwest) grew its household deposit book by 5.4 per cent over the 12 months and 1.2 per cent over the three months.Westpac (including St George) grew household deposits by 5.4 per cent over the 12 months and 0.5 per cent over the three months.Westpac chief executive Gail Kelly said earlier this month that the slowdown in deposit flows was the result of a decision to change the profile of the book - re-pricing to discourage hot money, so putting the business on a more sustainable footing with a better margin.The bank's net interest margin fell from 2.26 per cent in the March half last year to 2.17 per cent in the September half, before moving back to 2.21 per cent in the latest half.Banks don't like to write unprofitable business, but they don't like to lose market share, either.Smaller institutions have also struggled to get their settings right.  ING Direct fell well below system in retail deposits over the past 12 months, with growth of just 4.9 per cent, but got back ahead of system in the past three months.ING Direct's executive director of savings, Brett Morgan, said in an interview earlier this year: "Our household deposits grew very strongly in late 2009. It proved to be hot money and it ran off in 2010."RaboDirect has seen a see-sawing performance over the past year - up 89 per cent for the 12 months, down 5.5 per cent over the past six months and up 7.9 per cent over the past three months.The bank had a market-leading introductory rate until the end of last year, came back to the pack early in the year and recently reinstated a 6.5 per cent introductory rate on its High Interest Savings Account. The banks with the strongest deposit in-flows over the three months to April have been HSBC (up 14.5 per cent), Bank of Cyprus (7.6 per cent), Beirut Hellenic, formerly Laiki Bank, (7.1 per cent), ME Bank (5.1 per