Skip to main content

Deposit Times Are Changing

04/22/2024 07:27 pm

By Ray Birch

LAKE FOREST, Ill.— While the U.S. money supply in recent years has appeared to be stable, one economist says that’s not the case, adding that money supply components have been moving as wildly as a theme park ride and affecting deposits at FIs across the country.

“What’s the story?” asked Michael Moebs, economist and chair of Moebs $ervices, whose new study takes a detailed look at money supply components. “Insured transactions have fallen but are at an all-time high since 1914. Insured savings are making a big comeback. And uninsured deposits are soaring with insured deposits. Total money supply is far from stable. It is like a Disney amusement park ride with people looking suspiciously calm after a wild ride where each screamed and yelled as limbs and bodies were thrown around.”

Feature Money Supply

Moebs said Federal Reserve Chair Jerome Powell’s “new definition of money,” announced in the second quarter of 2020, has finally been implemented by financial institutions of all sizes.

“FIs all over are marketing and selling as dollars and accounts are moving to the best deals and highest rates,” he said.

chart

What Happened in 2023

Moebs detailed what happened with money supply in 2023:

  • Regular DDA (no interest) accounts fell slightly, by (1.7%) or about $90 billion, yet are still at their highest levels since 1914 when the Fed starting tracking money
  • Interest paying DDA levels fell (11.5%), the lowest since COVID started in U.S in. January 2020
  • Savings levels dropped dramaticaly (13.9% or $1.5 trillion), and are at their lowest level since COVID started. “In March 2020, when Powell eliminated reserve requirements and monthly transaction restrictions moving savings to M1, the bell started tolling for savings,” Moebs said. “The saver is moving money to DDA since saving rates are less than an average of 25 BPS. Plus, DDA is where stimulus funds came into play and have left about $1 trillion”
  • M2 was left with term-money CDs and retirement accounts (IRAs and Keoghs)
Moebs Mike

Michael Moebs

Additional Changes—And a First

Moebs highlighted the major money supply changes that ocurred last year:

  • Retail CDs had a huge resurgence “after almost dying” during COVID. Retail CDs increased 282% in 2023 and now are over $1 trillion
  • Jumbo CDs surged 46.7% to more than $800 billion

“For the first time since starting in 1962, retirement accounts at depositories dropped (19.3%),” Moebs said. “Why the dramatic shift in money? The answer is rates. Wall Street rates are being offered for all CDs and staying low for IRAs and Keoghs. M3 is money market mutual funds. Rates for MMMFs soared and funds poured in. Dollars mainly came from depositories. The most sensitive was depository retirement deposits.”

Effect on Money Stock

Moebs reiterated that pricing is influencing money stock.

“Gathering funds has gone beyond deposit insurance caps of $250,000. Risk is fundamental to price. Depositories need to adhere to analytical systems such as debit scoring and forego judgemental approaches,” Moebs said. “CDs are returning. Savings are falling. DDA is high. MMMFs on Wall Street are soaring. The signals call for new and different methods for managing deposit portfolios. Info is vital.  Measuring and pricing is essential. Deposit times are changing.”

Comments

Post a Comment

Please no profanity or political comments.

Popular posts from this blog

Honoring Our Member Credit Unions Ranked Among the Top 100 in 2025

Celebrating Excellence: Honoring Our Member Credit Unions Ranked Among the Top 100 in 2025   Best-performing US credit unions of 2025 At NCOFCU, we take immense pride in the strength, resilience, and impact of our member credit unions. Today, we are thrilled to recognize and celebrate several of our members who have earned a place among the Top 100 Best Performing Credit Unions of 2025 —a testament to their unwavering commitment to service, financial stewardship, and community leadership. This achievement is not just about rankings—it reflects the daily dedication to members, the trust built within communities, and the innovation that continues to drive our movement forward. 🌟 Our Honored Members We proudly congratulate the following institutions for their outstanding performance: #7 – Long Beach Firemen's Credit Union A remarkable top-10 finish that highlights exceptional operational excellence and member value. Long Beach Firemen’s CU continues to set a high bar for perform...
Post a Comment
Read Complete Article HERE>»

Fire Police City County FCU rebrands to reflect company growth

FORT WAYNE, Ind. (WANE) – A federal credit union with a long history in the Fort Wayne area is changing its name to something that the company said Tuesday reflects its ability to serve a larger sector. Fire Police City County Federal Credit Union, founded in 1933, will go by Summit Choice Credit Union starting in April. Members and locals will start to notice new signage and aesthetic changes at each branch throughout the month. The rebranding does not affect the credit union’s structure, ownership, or member accounts, according to the news release. Summit Choice Credit Union remains a member-owned financial cooperative, governed by the same principles and operated by the same team.  Its website  reminds members that new cards are being issued due to the rebranding. The credit union was originally formed for the families of local firefighters. Today, it serves employees of more than 350 local businesses around greater Fort Wayne. “Adopting the name Summit Choice Credi...
Post a Comment
Read Complete Article HERE>»

The United States at 250: How the Country Has Changed in the Past 50 Years

  In July, the United States will celebrate its 250th anniversary. The country’s last major milestone was 50 years ago, at its bicentennial on July 4, 1976. U.S. society has changed profoundly since then. Over the past five decades, the U.S. population has  aged significantly,  with the percentage of people 65 and older nearly doubling. The country has also become  more racially and ethnically diverse,  as growing shares of people identify as Asian or Hispanic. And following more than 70 million immigrant arrivals, the percentage of  foreign-born people  in the population has more than tripled.  Americans are also  less likely to be married  than ever before. Women – who now have far more options outside of the home than they did in 1976 – have contributed to a  boom in higher education  and helped  expand the workforce.  And even though many Americans are financially better off than they were 50 years ago,  econ...
Post a Comment
Read Complete Article HERE>»

The Case for Sharing a CEO Between Credit Unions

  Embracing Collaboration: The Case for Sharing a CEO Between Credit Unions In recent years, credit unions have faced numerous challenges, from regulatory pressures to evolving member expectations. As many seasoned leaders retire, smaller credit unions often find themselves at a turning point. In this landscape, one innovative solution is gaining traction: sharing a CEO between two credit unions. This approach not only addresses financial constraints but also fosters collaboration and enhances service delivery. The Rationale Behind Sharing a CEO 1. Financial Sustainability One of the most pressing concerns for small credit unions is maintaining financial health amid rising operational costs. A shared CEO model alleviates the financial burden of hiring and compensating a full-time executive. By splitting salary and benefits, both credit unions can allocate resources more effectively, allowing for investment in member services, technology, and community initiatives. ...
Post a Comment
Read Complete Article HERE>»

Reading Up On Recessions

  Reading Up On Recessions       Background Stemming from the Latin word “recessus” (meaning “a retreat”), recessions are  sustained periods  of declining activity in a country’s economy. During a recession, unemployment rises while economic output falls across a large swath of industries. Recessions are inevitable in modern economies, with one occurring about every six to seven years ( What causes recessions ?).   One common definition of a recession is when a country logs two consecutive quarters of shrinking gross domestic product, but in practice, ...
Post a Comment
Read Complete Article HERE>»

Sunday Reading - Landmine Rat Honored

  Landmine Rat Honored   Cambodia unveiled the world’s first statue honoring a landmine-detecting rat (w/photo) Friday. Magawa the rat lived to 8 years old and identified more than 100 landmines and other explosives from 2016 to 2021.  There are more than 100 African pouched rats deployed in landmine detection operations across the world. To identify mines, the rats are trained to sniff out explosive compounds like trinitrotoluene, or TNT. (The rats are not heavy enough to trigger detonation.) In Cambodia, up to 6 million landmines remain undiscovered, most planted during three decades of conflict, from the Vietnam War era through Cambodia's civil war . Since 1979, roughly 20,000 people have been killed in Cambodia, and roughly 40,000 wounded as a result of the mines. Magawa cleared more than ...
Post a Comment
Read Complete Article HERE>»

Sunday Reading - The gold standard, explained

  Gold Standard       The gold standard, explained A gold standard is a system where a country’s currency is pegged to, and can be converted into, a fixed amount of gold. It’s typically meant to create a sense of security in the country’s currency: When a government uses a gold standard , its currency can be exchanged for an equivalent amount of gold—although regulations around redemption vary by country.   After the Civil War, in 1873, America adopted the gold standard for the first time. At the time, if gold was priced at $100 an ounce, each dollar  rep...
Post a Comment
Read Complete Article HERE>»

Open Banking Pushes Leading Credit Unions Ahead In Race For Member Loyalty

  https://youtu.be/pUIV8hwSDCE NEW YORK—Credit unions that embrace open banking aren’t just keeping pace with competitors—they’re pulling ahead, new data show. A new report finds that innovation in digital tools and personalized experiences is emerging as the decisive factor separating credit unions that win lasting member loyalty from those at risk of losing ground. “ The 2025 Credit Union Innovation Readiness Index: Closing Gaps, Winning Members ,” a June report produced in collaboration between  Velera  and PYMNTS Intelligence, underscores innovation as a defining factor for credit union success. iStock-Korakrich Suntornnites “Facing shifting expectations from both consumers and small to medium-sized businesses (SMBs) toward digital convenience and tailored experiences, credit unions must modernize not just to compete with traditional banks, but to remain relevant to their members. The report, based surveys of 500 credit union executives, 15,000 U.S. consumers, and nea...
Post a Comment
Read Complete Article HERE>»

Sunday Reading - What is the Dow Jones?

    What is the Dow Jones? Created in 1896, the Dow Jones Industrial Average is one of the world’s oldest and most widely recognized stock indexes—a measure tracking the stock performance of a selected group of companies ( see most recent data ). Originally designed to track America’s leading industrial firms, the Dow has evolved into a cultural and financial shorthand for the health of the US economy. As of 2025, it measures 30 major companies —like McDonald's, Boeing, and Nike—across sectors such as technology, healthcare, finance, and consumer goods.  Unlike most modern indexes, which are weighted by the total value of a company’s shares, the DJIA uses a price-weighted formula —meaning stocks with higher share prices exert more influence, regardless of company size. The DJIA has been updated 59 times since its creation to reflect changes in the US economy ( see ch...
Post a Comment
Read Complete Article HERE>»