This month’s Review highlights notable trends and projections in DCG’s Deposits360°® Cross-Institution Analytics database and deposit pricing and volume models.
Uncertainty Ahead
Deposit growth trends began the year in the red as non-maturity deposit outflows exceeded the gains in time deposit balances. Looking back over the last three years of data, we can see that January tends to be a challenging month for growing deposits due to seasonal transactions for both businesses and consumers. Time deposit portfolios grew minimally and have not seen meaningful growth for the last four months. Without the time deposit growth that many institutions realized and relied on in 2023 and the first half of 2024, the outlook for growing overall deposits has become a lot more uncertain.
Source: Darling Consulting Group Deposits360°®
The reality is that underwhelming growth trends may persist in 2025. DCG’s Deposits360° balance forecasting models predict modest NMD growth and net CD outflow for the remainder of the year. If the Fed holds its policy rate steady, we may see about 5% NMD growth over the next 12 months. DCG’s CD forecast projects balance reductions of about 3% over the same period. If rates move 100bp lower, NMD growth may increase to 8%, but CD outflow would likely intensify. Given the expected pressure on CD balances, managers should follow CD migration and rollover trends closely and develop strategies to protect and retain these balances, particularly those balances held within core deposit relationships.
Rate Trends
The general theme of recent deposit rate trends is that time deposit pricing is adjusting lower more quickly than non-maturity deposits. This is exactly what DCG expected and forecasted. Notwithstanding, CD rates in the Cross-Institution database have declined to the 4.00% mark, and this has been a level that many institutions have used to anchor their pricing on CD Specials. As shown below, 6-to-11 Month CDs are still the highest-priced offerings at the industry level, but the rates on these products are also trending toward breaking below the 4.00% level.
Source: Darling Consulting Group Deposits360°®
Considering newly-opened 1 Year CD Special rates, the industry was quick to react to the Fed’s rate cuts in September, November, and December. However, the spread between newly opened rates and the Fed Funds rate is tighter than it was in 2023 and 2024, suggesting that premium-priced CDs still have room to fall, even if the Fed holds its policy rate static. The most competitive rate offerings (90th percentile of the Cross-Institution database) were priced at or slightly below the effective Fed Funds over the last two years, and this relationship has remained intact through 2024.
Source: Darling Consulting Group Deposits360°®
Balance Trends
Given the rate trends in CD portfolios and their trajectory toward falling below 4.00%, the next logical question might be: “How will balances react to ongoing CD rate reductions?” To answer, we looked at recent net account balance inflow trends for CDs under various rate bands. Within this analysis, there are a few items to note: 1) net inflows for the 4.50% to 5.00% range have completely flatlined as these offerings become fewer and farther between in the marketplace; 2) CDs in the 3.50% to 4.00% band have the highest level of inflows; and 3) all of the lower rate bands are beginning to see inflows, signaling that depositors are increasingly rolling into lower-rate products.
Source: Darling Consulting Group Deposits360°®
Darling Consulting Group will continue to monitor the Cross-Institution data in Deposits360° and bring you insights to help you navigate the current economic environment.
To learn more about how DCG's Cross-Institution Analytics can help drive strategic decision-making, click here.
© 2025 Darling Consulting Group, Inc.
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