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total investments graph

Following a record setting second quarter, investment balances at credit unions rose 3.4% from June (up by $18.1 billion), totaling $551.9 billion at the end of September 2020. Within the portfolio, credit unions worked to deploy excess cash into traditional investments to mitigate rising earnings pressures following Fed rate cuts in March. Cash balances fell 2.5% from June, while investments in securities and certificates expanded 7.4%.

Despite segments of the economy in varying stages of re-opening this summer, deposit growth continued to outpace historical rates as consumers remained hesitant to resume spending at pre-COVID levels. In total, share balances rose 2.4% from June, and 18.1% over the last 12 months. Keeping with recent trends, core deposits (checking, savings and money market accounts) accounted for 113.4% of inflows, surpassing the 100% mark due to a contraction in certificate accounts. This marks the second consecutive quarter of certificate run-off after peaking in March 2020, as credit unions today face starkly different liquidity challenges than just nine months ago.

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