The Fed’s 50 bp salvo in September has marked the official start of the rate downcycle, and FIs across the industry have responded by pulling back rates on both their retail CD and savings products. But their most rate-sensitive and financially savvy customers were also watching intently. A month prior, they made their move to lock up the remaining high-rate CDs that were available before the Fed’s announcement.
According to Curinos’ Retail Deposit Analyzer, new CD volume ticked up in August to a monthly $367K acquisition dollars per branch, back to levels that were previously reached only in 2023 when rates were on the rise (see chart). The August rebound suggests that CD volume will likely remain strong in the coming months as renewing customers who are more financially educated will look to roll to another CD and lock in higher rates before rates fall further.
That makes CD acquisition an attractive lever for banks looking to grow deposits in the falling rate environment. To do so at the lowest possible cost, data-driven analytics and tactical pricing support, such as that provided by Curinos advisory, can be an essential component in mapping out a falling-rate deposit playbook.
Acquired CD Balances per Branch | Jan ‘22 – Aug ‘24
The uptick in acquisition volume indicates CDs remain an
important lever for FIs looking to grow deposits as rates fall.
Source(s): Curinos Consumer Deposit Analyzer
