MADISON, Wis. — Over the past three years, certificates of deposits have accounted for 118% of all deposit growth.
According to the latest Credit Union Trends Report from CUNA Mutual Group. During 2007, total savings increased by $29.7 billion. Almost 86% of this gain came from higher cost CDs, which were up 13% for the year. Low cost deposits–regular shares and share drafts–now equal 39% of deposits, down from over 50% just three years ago. Regular shares declined 4.7% in 2007 and share drafts were down 5.4%.
Despite Fed Funds rate cuts since the beginning of September 2007, credit union deposit yields have barely come down as competition from entities such as Charles Schwab, ING's Orange Account and others remains intense, said Dave Colby, chief economist at CUNA Mutual, adding "these competitors will not disappear anytime soon."
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