It’s the beginning of yet another new year, and also the beginning of more exciting research from Raddon. Why not kick off 2025 with a little sneak peek into some of our deposit baseline research? Although this is a study we trend year after year, we always look for ways to mix it up and add more nuance to the conversation around deposits. With certificates on the minds of not only financial institutions but also many consumers, we wanted to get to the bottom of their thoughts, feelings and reasons behind using this product.

For financial institutions, it’s important to know who has a certificate of deposit in 2024 and how much they have deposited in said account. We wanted to know more about how many of these accounts were opened for the first time.

Figure 1: CDs opened and first-time CDs by generational segment

Millennials and Gen Z are starting to open more certificates of deposit

Source: Deposits and Investments, Raddon Research Insights, 2024

While less than half of both Gen Z and Millennial consumers have a certificate of deposit, 73% and 79% of those consumers, respectively, stated that it was their first one. This demonstrates that those promotions and interest rates are being noticed by accountholders, especially younger ones.

Figure 2: Reasons for opening first CD by generational segment

Most consumers opened a CD to increase their savings; however, Baby Boomers are looking for higher interest rates

Source: Deposits and Investments, Raddon Research Insights, 2024

There are many different reasons a consumer might open a CD, including in response to a promotion offered by an institution, wanting to limit their ability to move the funds easily, or to increase savings in general. We have found in this study that the main reason for opening a first CD is to increase savings. This may go hand in hand with higher interest rates, because more money is accrued with a higher rate, and not being able to transfer the funds easily also allows those savings to build and increase. Regardless, the main goal is to increase the amount of funds in the account. Baby Boomers, however, are mainly seeking out those higher interest rates.

The important takeaway from this data is that different ages and generations have different goals and reasons for opening a CD. What we need to think about is how can we positively affect all age groups when it comes to their banking products and help them reach their financial goals.

Important Information

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