• Most conceptual bucket models have an upper limit on simulated soil moisture deficit. • Problems arise when the bucket “empties” because ET drops to unrealistic (low) levels. • Alternatives include bottomless buckets or deficit-based soil moisture accounting. • Here, we switch to a deficit-based scheme while keeping everything else constant. • Tested over historic drought, model performance and realism are enhanced. Rainfall-runoff models based on conceptual “buckets” are frequently used in climate change impact studies to provide runoff projections. When these buckets approach empty, the simulated evapotranspiration approaches zero, which places an implicit limit on the soil moisture deficit that can accrue within the model. Such models may cease to properly track the moisture deficit accumulating in reality as dry conditions continue, leading to overestimation of subsequent runoff and possible long-term bias under drying climate. Here, we suggest that model realism may be improved through alternatives which remove the upper limit on simulated soil moisture deficit, such as “bottomless” buckets or deficit-based soil moisture accounting. While some existing models incorporate such measures, no study until now has systematically assessed their impact on model realism under drying climate. Here, we alter a common bucket model by changing the soil moisture storage to a deficit accounting system in such a way as to remove the upper limit on simulated soil moisture deficit. Tested on 38 Australian catchments, the altered model is better able to track the decline in soil moisture at the end of seasonal dry periods, which leads to superior performance over varied historic climate, including the 13-year “Millennium” drought. However, groundwater and GRACE data reveal long-term trends that are not matched in simulations, indicating that further changes may be required. Nonetheless, the results suggest that a broader adoption of bottomless buckets and/or deficit accounting within conceptual rainfall runoff models may improve the realism of runoff projections under drying climate.

Evidence suggests that catchment state variables such as groundwater can exhibit multiyear trends. This means that their state may reflect not only recent climatic conditions but also climatic conditions in past years or even decades. Here we demonstrate that five commonly used conceptual “bucket” rainfall‐runoff models are unable to replicate multiyear trends exhibited by natural systems during the “Millennium Drought” in south‐east Australia. This causes an inability to extrapolate to different climatic conditions, leading to poor performance in split sample tests. Simulations are examined from five models applied in 38 catchments, then compared with groundwater data from 19 bores and Gravity Recovery and Climate Experiment data for two geographic regions. Whereas the groundwater and Gravity Recovery and Climate Experiment data decrease from high to low values gradually over the duration of the 13‐year drought, the model storages go from high to low values in a typical seasonal cycle. This is particularly the case in the drier, flatter catchments. Once the drought begins, there is little room for decline in the simulated storage, because the model “buckets” are already “emptying” on a seasonal basis. Since the effects of sustained dry conditions cannot accumulate within these models, we argue that they should not be used for runoff projections in a drying climate. Further research is required to (a) improve conceptual rainfall‐runoff models, (b) better understand circumstances in which multiyear trends in state variables occur, and (c) investigate links between these multiyear trends and changes in rainfall‐runoff relationships in the context of a changing climate.