We're heading for a $950 billion CD 'maturity tsunami'

Published On Aug 30, 2024, 12:14 PM

The article discusses an impending $950 billion wave of maturing Certificates of Deposit (CDs) in the U.S., which will necessitate decisions from savers regarding the management of their funds. Most savers who locked in high rates last year will face lower rates upon reinvestment. The author advises against auto-renewing CDs, suggesting instead that investors shop around for better rates and consider longer-term investments, such as 2-year CDs or multiyear guaranteed annuities (MYGAs), which currently offer higher rates than many CDs. Additionally, the article stresses the importance of aligning short-term money with risk-averse investment strategies.

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Stock Forecasts

JPMView JPM chart on TradingView

Negative

As CD maturities surge, there will be increased demand for alternative fixed-income products and potentially a shift towards online banks and credit unions that offer competitive rates. This could negatively impact traditional banks with lower rates, possibly leading to a decline in their stock prices as customers move their funds.

FGView FG chart on TradingView

Positive

Financial institutions offering MYGAs may see increased interest as individuals look for secure investments with higher returns, potentially boosting their stock performance.

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