Tag: Deposit Structuring

Why Your Bank Should Tie Checking and CDs Together

Boosting Deposit Performance

As deposits become more valuable, banks are getting more aggressive about raising funds. While we are not big fans of increasing liabilities through certificates of deposits (CDs), banks that do may want to consider requiring a checking account in order to increase performance. In this article, we look at some banks that do just that and how it helps them mitigate the performance degradation that normally occurs when offering higher-priced CDs.

 

Offering a Package of Products

 

Why Banks Should Limit Their CD Offerings

Driving Better Liability Performance - Deposit Structuring

As a general statement, banks offer too many options for certificates of deposits (CDs). Consider that the average bank offers 12 different maturities, some “specials,” plus several different tiers of pricing within each maturity. We have seen banks with as many as 42 different CD options which is inefficient for every party. The problem is too many CD offerings can increase a bank’s cost, confuse its customers and, worst of all – damage its overall deposit performance. In this article, we look at a counterintuitive strategy for increasing deposit performance.

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