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Caution: Consumer CD Renewal Bubbles Ahead

This Month in Retail Banking

As the result of close to a year of strong inflows into CDs, the banking industry will soon be facing significant CD renewal bubbles that could begin as early as this September. According to Curinos Retail Deposits Analyzer, more than 60% of current CD balances are expected to mature between September 2023 and March 2024. In the peak months of February and March 2024, the renewal volume is expected to be up to 11% of total current CD balances. (See Figure 1.)

Figure 1: Industry Average CD Maturing Balances by Term Bucket | July ’23 – July ’24

Source(s): Curinos Retail Deposits Analyzer | Note(s): Simple averages displayed. *Current CD End Balance as of May’23 ​

The great majority of CDs maturing in the coming months have terms of 11 to 24 months, but further expanding the renewal bubble will be a material number of shorter-term CDs (terms less than 11 months), many of which were acquired in Q1 ’23.     

These projected maturities are not a one-time fire drill. Competitive rates are expected to continue driving balances into CDs, and with the potential for further Fed rate hikes on the horizon, more CDs are likely to be booked in the remaining months of the year, further sustaining high volumes of CD maturities well into 2024. 

Navigating CD renewals in the quarters to come will be a major test for financial institutions. In an increasingly customer-centric environment, data-derived retention tactics will be critical in guiding bankers to success. 

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