New research from Market Rates Insight showed that banks and credit unions may be offering consumers and members the reverse of what they are demanding with CDs.
Demand for short-term CDs is down 28% but banks and credit unions added 26% more short-term CD products so far this year, according to MRI. In the first nine months of 2010, demand for three-month CDs dropped by 16% from a balance of $277 billion in January to $232 billion at the end of September.
Despite such a substantial decrease in demand, banks and credit unions increased their three-month CD product offering by 10% over the same time period, MRI found. Meanwhile, demand for CDs of three to 12 month terms dropped by 12% from a balance of $502 billion to $443 billion, yet banks and credit unions added 16% more CDs of six, nine, and 12 months terms.
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