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CD Growth Still Strong, But Trend Line Has Gone Flat

Nothing like inflation and an aggressive series of rate hikes by the Fed to wake CDs from a decade-and-a-half slumber.  

CD balances more than doubled in 2023, driven by increasingly attractive rates that lured funds from liquid balances. In percentage terms, at year end, they accounted for roughly a quarter of the overall deposit portfolio (see chart, left side). But month-over-month growth slowed in the latter half of the year, stabilizing at around 5% (see chart, right side). The deceleration was likely due to deposit acquisition costs easing as expectations grew that interest rates would be cut in 2024.   

These data indicate that CDs may be losing their efficiency as a way to acquire new deposits. Renewals, on the other hand, should remain robust. Strong growth in 2023 means a high volume of CDs will mature each month this year.  

So, even though their growth rate may be moderating, CDs will represent a substantial share of deposits in a higher-for-longer environment and will be critical to a depository institution’s success. 

CD Growth Trends in 2023

CD balances have grown to almost a quarter of the industry portfolio, but the speed of growth is leveling off.
Curinos Consumer Deposit Analyzer
Source(s): Curinos Consumer Deposit Analyzer | Note(s): Simple averages displayed | Consumer and branch balances displayed only​

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  • Author
    • Adam Stockton

      Adam is a Managing Director who leads the Retail Deposit & Lending businesses at Curinos. He has spent more than 18 years advising financial services companies on growth and profitability strategies, focused on product management, growth, profitability and pricing. Clients include a majority of the top 25 US banks, a number of the largest banks in Canada and Australia, brokerages, Credit Unions, direct banks and fintechs.​ Adam’s work leads to actionable, sustainable strategies that help clients grow economically through the application of granular analytics, purpose-built tools and proprietary benchmark data. He regularly publishes and speaks, particularly topics relating to product profitability and growth.​ His teams are responsible for Curinos’ Retail Deposit Optimizer product management and price optimization platform; Deposit Analyzer benchmarking products for Consumer, Wealth and Small Business deposits; LendersBenchmark Analyzers for Small Business Unsecured Lending; rate and fee data for Consumer and Small Business; and strategic consulting practices across the Retail areas. ​

      View all posts Managing Director, Retail Deposits and Lending
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