Consumers appear to be responding to aggressive premiums offered on 48-month certificates of deposit at banks.
Over the past 12 months, according to data-tracking firm Market Rates Insight, balances of four-year CDs have increased from $149 billion to $166 billion. During the same time period, balances of all other CDs declined from $264 billion to $225 billion. Credit union data was not tracked by MRI.
Premiums are likely driving the growth, MRI found. Over the last 12 months, the premium offered on 48-month CDs increased from a low of 0.49% to a high of 1.04% last week, which was above the 0.59% national premium average on all deposit products.