Wealth clients didn’t adopt CDs as quickly or as intently as their retail counterparts, and much of the money they did move could end up being a one-and-done.
More than 75% of upcoming maturities in 2024 are first-time issuances, which usually renew at a much lower rate than CDs that have renewed at least once before (see chart). But that doesn’t mean banking institutions should give up on the 9% of wealth deposit portfolios currently sitting in short-term retail CDs.
Banks should capitalize on the high-touch, personalized engagement model that advisors have with their clients by proactively reaching out prior to maturity. While some wealth clients will want to simply roll over into another short-term CD, others seeking more liquidity (for instance, to invest in securities during an election year) may require exception pricing or promos that provide a similar yield in a wealth savings account. By making a range of deposit options available, banks have a better chance of retaining the funds while also being responsive to client preferences.
2024 Wealth CD Maturity Balances By Month
First-time issuances dominate and are much less likely to renew, but a proactive and personalized approach can help keep these deposits in house.
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