Liquidity & Balance Sheet
Time Deposits (CDs)
Also known as Time Deposits, Certificates of Deposit
Time deposits are certificates of deposit (CDs) with a fixed maturity and rate. Smaller, retail CDs are reasonably stable; large 'jumbo' CDs above the insurance limit are more rate-sensitive and treated as a less reliable funding source.
How is Time Deposits (CDs) calculated?
Schedule RC-E reports time deposits split at the $250,000 insurance threshold. Retail CDs at or below the limit behave more like core deposits; jumbo CDs above it are rate-chasing money that leaves when a competitor pays more.
Why does Time Deposits (CDs) matter?
Time deposits are a more expensive and less stable funding source than checking and savings. A bank leaning heavily on CDs (especially jumbo and brokered CDs) pays up for funding and faces rollover risk when those deposits mature in a competitive rate market.
How do you interpret Time Deposits (CDs)?
Read time deposits as a share of the funding base and watch the jumbo portion. A rising CD share signals the bank is paying for growth it can't fund with core deposits; heavy reliance on uninsured jumbo CDs adds both cost and flight risk.
What do Time Deposits (CDs) levels indicate?
| Range | Label | Interpretation |
|---|---|---|
| Low, retail-heavy | Strong | Modest CD reliance, mostly insured retail. |
| Moderate | Adequate | Reasonable time-deposit share. |
| High / jumbo-heavy | Watch | Costlier, more rate-sensitive funding mix. |
| CD/brokered-dependent | Concern | Funding leans on hot money with rollover risk. |
Worked example
Frequently asked
Are CDs considered core deposits?
Retail time deposits at or below the $250,000 insurance limit are generally counted as core. Jumbo CDs above the limit are excluded from core deposits because they are rate-sensitive and prone to leave.
Why are jumbo time deposits riskier funding?
Balances above the insurance limit are uninsured and typically chase the best rate, so they are quick to leave for a competitor and quick to run in a stress event, making them a less stable funding source.
Sources
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