Magazine article American Banker

Banks Focus on CDs Market Rejects

Magazine article American Banker

Banks Focus on CDs Market Rejects

Article excerpt

Byline: Howard Stock

Banks keep pumping out low-rate, short-term certificates of deposit despite the fact their customers do not seem to want them, according to a nine-month analysis of the product by Market Rates Insight in San Anselmo, Calif.

"It's puzzling," said Dan Geller, the executive vice president of MRI. "Customers are pulling money out of short-term products, and in response, banks are introducing more short-term products."

Indeed, deposits in short-term CDs, those with maturities of 12 months or less, declined 12% in the first three quarters of this year, to $675 billion, while banks and credit unions introduced 26% more CD products. (Geller is not at liberty to state the exact number of CD products on the market.) "The question is, why make more of what their customers say they don't want?" he said.

The problem is, most banks are not sweetening the deal.

Though the highest-yielding short-term CD is paying 1. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.