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This paper critically considered the relationship amid private sector deposits and the performance of deposit money banks in Nigeria for the period 1990-2019. Private Sector Deposits was proxied by demand deposits, Deposit Savings and time deposits, while Performance was proxied by Return on Assets of all deposit money banks in Nigeria for the period reviewed. Secondary data was obtained from the website of Central Bank of Nigeria statistical bulletin and the website of Nigerian Deposit Insurance Corporation (NDIC). We conducted Pretest using Augmented Dickey- fuller (ADF) test statistic to test for unit root. A mix order of integration was observed. The ARDL was thereafter used to estimate the equation, while the bounds test result showed the long run relationship. The short run result revealed negative relationship at some lag periods, and there was no significant relationship amid private sector deposits and Performance of deposit money banks in Nigeria. The bounds test results showed a weak long run relationship amid the variables. These results has so far exposed the fact that private sector funds such as demand deposits, savings deposits, time deposits with Deposit Money Banks in Nigeria do not significantly influence performance the performance of the DMBs except they are used for investment decisions. The study concludes and recommends that, (1) Demand deposits, Savings deposits and time deposits in the custody of DMBs should not be kept unutilized. (2) At long run period, demand deposits, savings deposits, and time deposits should be invested on investment options that would yield positive return on investments. (3) The Central Bank of Nigeria should regulate the level of depositories in the custody of DMBs in Nigeria to ensure sustained financial stability in Nigeria.

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