Curinos was pleased to welcome senior retail banking leaders from deposits product, pricing, finance and balance sheet management from more than 30 financial institutions to its Retail Deposit Optimizer Forum for 2025 in Chicago, May 13 and 14. Guests, representing Curinos’ current customer institutions, got an in-depth look at Curinos data, solutions and insight capabilities and engaged with Curinos deposits-industry experts, and each other, on how to think about and plan for the complex problems facing retail financial institutions at this time of heightened economic uncertainty. At the same time, explicit care was taken to avoid disclosure or discussion of institution-specific pricing.
Topics included the state of deposits today, how they got here and where they’re headed. Participants were also given an update on Curinos’ tools and solutions for making better pricing decisions, including an all-new AI-powered Scenario Solutions that has been added to Curinos’ flagship Retail Deposit Optimizer. The new capability delivers instant, executive-ready insights to accelerate pricing decisions and improve usability across banking teams. Here are some of the key takeaways from the Forum’s presentations and discussions:
1. Even as the Fed has relaxed rates, portfolio betas have remained low.
During the down side of a rate cycle especially, rate actions tend to lag the Fed. This is particularly true in the current cycle for several reasons. First, most checking deposits exhibit no beta, and more than half of consumer deposits are under 25 basis points and therefore have no room to reprice downward. Second, remixing in pursuit of rate: Checking balances and low-rate savings are migrating to rate-based MMDAs and CDs, and balances that had been gained through promotions are now responding to new promotions and exceptions. Third, depositors are switching from lower portfolio-rate products to those whose acquisition rates remain elevated.
Total Portfolio Rates | Traditional Banks |
Jan ‘22 – Mar ’25 | Quartiled by Portfolio Rate
Source(s): Curinos Consumer Deposit Analyzer, FRED | Note(s): Betas calculated using Federal Funds Target. Data is quartiled monthly based on portfolio rate. Simple averages displayed.
2. CDs were a key driver of deposit growth in 2024, but as rates drop, more deposits are likely to continue to switch out.
From Q1 ’24 to Q1 ’25, switch volumes from CDs into liquid products doubled. That’s likely because the difference in acquisition rate between savings and CDs fell by about 70 bp. The trend accelerated in late ’24 after the Fed began cutting rates that September. CD customers facing lower go-to rates at maturity are now finding liquid offerings have become more attractive, signaling a broadening consumer preference for liquidity over term. With the rate gap between CDs and liquid products narrowing, many depositors are concluding that what they can get from investing in a CD is not worth locking up their funds for an extended period of time, or any period at all. With consumer behavior shifting, analytics matter and a static strategy won’t work.
% Switch in From CDs | Savings |
Traditional Banks | Jan ‘24 – Mar ‘25
3. CDs are hardly all about hot money. Banks can use them strategically to build relationships.
Nearly half of all CD balances are held by customers with the full suite of deposit products. These are customers that are more likely to renew, and they exhibit less than half the attrition of CD-only customers and members. Not only can CDs help to retain rate-sensitive balances, they can often augment balances. Another effective way for banks to establish the long-term value is to price first-time renewing CDs competitively so they’re retained. That’s because at the second maturity, the CD holder is anywhere from 6% to 18% more likely to renew, depending on how deep their relationship is with the bank. If, for example, a renewing CD customer also has a checking account, the chances of a second renewal shoot up 10 percentage points, from 82% probability to 92%. This behavioral phenomenon can make it easier for a bank to relax its pricing the second time around.
Source: Curinos Deposit Analyzer
Source(s): Curinos Consumer Deposit Optimizer and Analyzer. | Note(s): Customer relationship is defined by >=0 of account balance in specified product | All CD terms included.
4. Near-term and lifetime household consumer losses from tariffs could apply future pressure on deposits.
Future impacts of tariffs are likely to show up first in commercial deposits, with a less certain impact on consumer deposits. But based on third party projections, households are expected to see decreases in deposit funds because of tariff-driven consumer losses in both the short and long term. That said, long-term tariff effects are difficult to predict and have yet to play out in consumer deposits thus far; the largest impacts may still be down the road.
Impact on Consumer Deposits
Tariff Impact Projections
1-Year Impact of 2025 Tariffs by Household Disposable-Income Decile
Source: Penn Wharton Budget Model (PWBM), The Budget Lab at Yale. | Reflects tariff effects as of April 15, 2025
5. It’s much more expensive to acquire than to retain.
Broadening and deepening customer relationships pays for itself down the road, not only in increased lifetime value but also because the cost of gaining new customers continue to spiral ever upward. Current acquisition rates are almost 100 basis points higher than portfolio rates. That makes reacquiring deposits 1.70% more expensive all-in than retaining them. That’s because of not only the higher cost of acquisition but also the toll that cannibalization can take on customers’ switching out of existing products. There’s also less new money to be had: acquisition in Q1 ‘25 was 13% lower than in 2024, despite Q1 acquisition rates having been closer to Fed Funds rates than in ’24. Perhaps more than ever, acquisition and retention strategies need to: analyze sources of acquisition and attrition (by product, balance tier, customer segment, geography); understand pricing and volume flows, trends and inflection points; and know the net cost of growth, including reacquiring, to inform retention.
Acquisition and Portfolio Rate | Savings Branch Banks | Jan ’22 – Mar ‘25
Source(s): Curinos Consumer Deposit Analyzer. | Note(s): Consumer balances only. Branch banks only. Simple averages displayed.
