diff --git a/CHANGELOG.md b/CHANGELOG.md
index c83455d36d14..b150a82a217f 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -277,6 +277,7 @@ Ref: https://keepachangelog.com/en/1.0.0/
 
 ### State Machine Breaking
 
+* (x/gov) [#11998](https://github.com/cosmos/cosmos-sdk/pull/11998) Tweak the `x/gov` `ModuleAccountInvariant` invariant to ensure deposits are `<=` total module account balance instead of strictly equal.
 * (x/upgrade) [\#11800](https://github.com/cosmos/cosmos-sdk/pull/11800) Fix `GetLastCompleteUpgrade` to properly return the latest upgrade.
 * [\#10564](https://github.com/cosmos/cosmos-sdk/pull/10564) Fix bug when updating allowance inside AllowedMsgAllowance
 * (x/auth)[\#9596](https://github.com/cosmos/cosmos-sdk/pull/9596) Enable creating periodic vesting accounts with a transactions instead of requiring them to be created in genesis.
diff --git a/x/gov/keeper/invariants.go b/x/gov/keeper/invariants.go
index 5179db3d5f82..6e0f9d4e0a51 100644
--- a/x/gov/keeper/invariants.go
+++ b/x/gov/keeper/invariants.go
@@ -35,7 +35,11 @@ func ModuleAccountInvariant(keeper Keeper, bk types.BankKeeper) sdk.Invariant {
 
 		macc := keeper.GetGovernanceAccount(ctx)
 		balances := bk.GetAllBalances(ctx, macc.GetAddress())
-		broken := !balances.IsEqual(expectedDeposits)
+
+		// Require that the deposit balances are <= than the x/gov module's total
+		// balances. We use the <= operator since external funds can be sent to x/gov
+		// module's account and so the balance can be larger.
+		broken := !balances.IsAllGTE(expectedDeposits)
 
 		return sdk.FormatInvariant(types.ModuleName, "deposits",
 			fmt.Sprintf("\tgov ModuleAccount coins: %s\n\tsum of deposit amounts:  %s\n",