Turn Drifting CD Balances Into Anchored Relationships

This week, the flip side of that conversation: the deposits that are quietly hurting you.

Most community banks loaded up on time deposits during the 2023-24 rate cycle. It worked to get funding out the door, balance sheets stayed liquid, and the loan side kept moving.

Now those CDs are still on the books at elevated rates, and a lot of them belong to single-product households with no checking relationship.

That’s an expensive combination.

The opportunity is to systematically migrate those balances, or at least those households, into relationship-anchored deposits before they reprice or walk to the next special down the street.

In practice that looks like:

• Identifying CD-only households with no other accounts
• Scoring them by profitability potential
• Running a targeted offer designed to convert

Done well, the math is hard to argue with: lower cost of funds, lower deposit beta, and a household you can actually cross-sell.