For years, CD/share certificates were dismissed as dated and boring compared to some of the more modern savings options today. But something unexpected is happening: CDs are back, and they’re hot as jalapeño’s armpit, especially among younger, digital-native savers.
For example, in June, approximately 42% of CD rate changes were increases, despite the Federal Funds rate remaining unchanged during June’s Federal Open Market Committee (FOMC) meeting. And get this from CD Valet’s research of 30,000 CD across 4,000 financial institutions: The average credit union CD APY was approximately 17% higher than the average bank CD. Of the institutions that increased CD rates, approximately 58% were credit unions while approximately 42% were banks. And finally, of the top 25 12-month CDs, 24 were offered by a credit union.
In a fast-moving interview on The Credit Union Connection, Seattle Bank and CD Valet CEO John Blizzard joins our founder/CEO, Sarah Snell Cooke, to unpack why CDs are spiking in popularity, what credit unions are getting right and why many are missing out on a significant growth opportunity. CD Valet is to credit unions (and banks) as NerdWallet is to lending. It’s a fast-growing marketplace platform that connects consumers with the best CD rates from more than 4,000 financial institutions and giving smaller players a digital edge they’ve long struggled to find.
John doesn’t hold back when discussing the challenges credit unions face. The issue isn’t that they don’t offer competitive rates. On the contrary, their APYs are often significantly higher than those at banks. The problem is visibility. “It’s a distribution problem,” John says, pointing out that great offers mean nothing if consumers can’t find them, especially in a digital world dominated by large national players.
That’s where CD Valet steps in. With more than 14 million pages viewed and an average transaction size nearing 100,000 dollars, the platform isn’t just driving clicks. It’s moving serious money. The key, John emphasizes, is pairing strong rates with seamless digital onboarding. If the user experience is clunky, younger savers won’t hesitate to abandon the process.
But perhaps the most compelling part of the interview is John’s openness. He offers not just a diagnosis, but a playbook: how to use teaser rates to attract trial, how to leverage data to optimize pricing along the yield curve, and how to turn one time CD customers into full fledged members. It’s clear he’s rooting for credit unions to win.
This isn’t a nostalgia trip about savings products. CDs are bringing sexy back in the digital-first economy.
Disclosure: Transcript below is automatically generated
Sarah Cooke
Hello and welcome everybody. I am Sarah Snell Cooke your host of The Credit Union Connection, and I’m here today with a guy from A, B, A, N, K, but he’s got a really good thing going on here. John Blizzard, he’s the CEO of Seattle bank, as well as that CD Valet, which I’m sure some of you work with. But welcome
John Blizzard
John. Good to have you. Good to see you. Sarah, thanks for having me on
Sarah Cooke
Absolutely And so tell us a little bit more about how CD Valet started and who you work with and that kind of stuff. Just real quick intro,
John Blizzard
Yeah, sure, yeah. We, we have a single location bank in Seattle, and we work with customers generally locally, but on the deposit side, we broaden that to be national. And we learned years ago to go compete digitally was just a whole different game. And so we learned a tremendous amount about the deposit business, about the digital competition, digital marketing. And we had decided there was not a good solution for banks like us or even credit unions to go compete digitally. So we created CD Valet as a marketplace for consumers and for financial institutions to compete. You can’t buy your way to the top of the rate table, for example, for consumers, they love our site. We’ve had almost 4 million people to our site. We’ve probably had 800 or 1000 in the last hour. Is resonate with consumers in a big way. And the reality is, what we found in our research, this goes back many, many years ago. Is the good old, boring CD business is, is about 15% of bank deposits and credit union and $3 trillion but it’s kind of an unloved area, and the banks and regulators people call them, you know, hot money and all this stuff, we call them savvy savers, and they have a lot of money, and we are, we are working really hard to get them the best deals and help the banks and credit unions who are really absent digitally. It’s a such a competitive marketplace to be found digitally when you’re competing against super big institutions, marketplaces that are very savvy. We enable them to go compete and be found, because oftentimes, basically, we find the credit unions or banks, community banks, just have the best deals by far, and we just try to help amplify that in a big way, to help the credit union or bank get find new members and new customers. Yeah, a lot of fun.
Sarah Cooke
Yeah, for sure. And although you say the CDs are kind of sexy right now, though,
John Blizzard
Kind of sexy, yeah, you’d be Yeah, shocked how many people are of open CD it’s not just, you know, the older generation, although they have a lot of money in CDs, there’s a whole lot of young people now putting money in CDs for the first time.
Sarah Cooke
Yeah, yeah. And some of the research you did most recently, you found, in June, the average credit union CD rate, the average APY, was approximately 17% higher than the average bank, credit union over a bank. So that was really interesting. There’s also, there’s a bunch of data you found, and I’m going to look at my notes here to make sure I get the numbers right. But of the top 25, 12 month CD rates, 24 of those are credit unions, and of the institutions that increase CD rates, approximately 58% were credit unions, and approximately 42% banks. So why is this happening? Are we looking at a liquidity issue among credit unions that’s not hitting the banks? Maybe as much or how much, how much of this is due to the tax exemption, if we’re allowed to talk on that subject.
John Blizzard
Sure, yeah, all those are anything’s free game. I’ve for my whole career, kind of avoid all the politics in banks and credit unions. I started my career in a credit union, been CEO banks for a long time, worked at the Federal Home Loan Bank, selling money liquidity of banks and credit unions. So I kind of kind of just avoid all the politics. We just try to drive solutions to consumers and help FIs, but it is great questions. First of all, we have the best data in the industry, because we are tracking 30, over 30,000 CD rates from over 4000 institutions every day, and we have a snapshot of that data that goes back quite a ways now, and so we can provide, and because we’re monitoring, hey, what credit unions? What banks change rates? Who went up, who went down, we can aggregate that data and then supply stuff like you saw in our rate water watchers report, which is, which is super unique. So that’s awesome, but, you know, it’s really more of, I think, for the credit unions, a lot of times, it’s a distribution problem on the marketing side, if you have a more constrained membership, right? If you’re in a couple counties, or if you’re even limited to a state, digitally, it’s more difficult to compete, because somebody that can offer a product nationwide is just an easier uh. Sign Up, button, buy now, button for the consumer. So it is definitely a challenge in a digital world. And when everything was, you know, hyper local, decades ago, that wasn’t the case, but now so many people are shopping for all their different products and services online or on their phone. It’s really, really hard for a local anything to compete digitally. So, so we can help with that, you know, in terms of, you know, hey, if you’re a great you have a great offer in Texas, and CD Valet, can, can, you know, put that on our site as an offering. We can let our subscribers know it’s a great offering in Texas. And so a lot of times it’s, I guess it comes back to it’s, it’s a distribution problem for the credit unions, but also marketing problem in terms of, like, You got to get the word out it is very costly to get a new member or new customer. Most banks and credits actually don’t know what it cost them, but it’s a lot more than you’d think. And so you got to go out and compete to find those, new members, new customers, we can help do that in a big way.
Sarah Cooke
I’ve seen upwards of 300 $300 per member.
John Blizzard
I’ve seen 1200 from very reliable sources in the industry. So, yeah, varies, and it varies, whether it’s, you know, is it a deposit account or is it a loan like? It’s pretty interesting, right?
Sarah Cooke
Yeah. So why? How can credit unions take advantage of this? And well, actually, let me back up. How do you solve for Field of Membership? Because you brought it up a little bit
John Blizzard
Yeah, we have a number of credit unions that are on our site. So you can just to back up, so the consumer can come to our site, they can sign up, see all 31,000 rates in a given day. And then we have over 50 financial institutions where they’re actionable. The consumer can hit open now, it goes right to their digital account opening, or if they don’t have that a lead form. And so we have a number of credit unions signed up, a lot, a lot of banks, but they could sign up and be actionable, and we could drive them leads. It’s super easy integration, so we could do that that quickly for them, but I think a biggest so some credit unions are national, or have the ability to be national, so that’s a super big advantage. Of course, some are a state, some are counties, or some are old school, seg based. And so I think one of the best strategies is it hasn’t been used on our platform a lot yet, but you see it used kind of in newspapers and stuff, is they offer that great, enticing rate to get somebody to try you out. So say a six, 7% CD rate for a six month, CD nine month CD for up to five or 10 grand, right? Get people to come try you out so you can drive it, you know, make it sexy, make it cool, make it like a great deal. And people will sign up, and they’ll jump through those extra hoops to become a member. And so if you do that, then you have a chance. You have just the opportunity to keep them and cross sell them on other products, but you got to go earn that. Yeah, and that’s one thing we’ve seen a lot of the financial institutions don’t market to their CD clients that are only that only have CDs to them. They do a pretty poor job of marketing and trying to make them a fuller relationship. So that kind of goes hand in glove as well.
Sarah Cooke
And so with credit unions having the advantage of the on the rate side. How can they take use that to their advantage?
John Blizzard
Yeah, well, so what we do on CD Valet is give them an opportunity. So if they sign up with us to be a partner, FI, we will do a bunch of marketing on their behalf, and we will drive them leads. And if they’re one of the best, you know offers on there, they’re going to get a lot of views. Remember, we have 4 million people come to our site. We’ve had 14 million pages viewed on our site. So if you want to come in and offer consumers something that’s compelling, you will get a lot of eyeballs on your offering. If you’re, you know, a credit union in San Diego and you want to drive a lot of business, or Maryland, or wherever, so you’re the more narrow your footprint, the more challenging will be through all your marketing channels. So the broader you can be, the better off you’ll be as well. But I understand different models and business plans,
Sarah Cooke
Yeah, yeah. And so research suggests that Gen Z is particularly budget conscious, particularly savings happy. My younger daughter, definitely not so much my son. But can this help credit unions track younger members, given the right technology and tools?
John Blizzard
I think for sure, you know it’s, I think offering that enticing deal to get them to try you is a great strategy. But also you have the other half of the equation, which is you have to operationally be ready to onboard digital clients. They’re not going to like a poor experience, and they will abandon very quickly. So, you know, we’ve implemented at our bank, very top notch digital account opening. Work with a number of other banks and credit unions that have great digital account opening but probably. Half of them or more the bank screens have either no digital account opening, it’s very poor, and you don’t just plug it in. You have to iterate and make it better, and you have to train your teams. You have to follow up very quickly to make it successful. We’ve seen that. We’ve iterated multiple times, and our bank recently raised 100 million in CDs, retail CDs through CD Valet in five weeks. And that’s a combination of the distribution of CD Valet in terms of it finding the consumers, but also all the tech on the back end and the train team. So that’s a super important component we’ve offered to banks and credit unions. Hey, we’ll share what we have and what we know we are, we are happy to be give advice, or have people come visit and walk them through what we’re doing. And we’re always learning from everybody else along the way, by the way, so yeah, so we’re open to that,
Sarah Cooke
Yeah, yeah, no. And account opening is one of those things that is so important, but also it seems to be difficult for many credit unions to navigate. How did what are the key things need for a good account opening technology experience?
John Blizzard
Yeah, there’s several out there. We use a company called prelim in in our bank, but there’s a number of other ones out there that are very good. And really it’s that seamless experience. It’s and consumers always the big two areas they get stopped at and you got to build processes around is IDB, identifying who they are, and funding. And those are the two sticky points where you really got to pay attention with your tech and how it’s designed, and your follow through from your client services team, your customer service team. But, yeah, there’s some great solutions. The probably the good thing is, probably the last three years, you’ve seen a huge investment from the community institutions investing in new digital so there’s a whole bunch of them. They’re going to come online or have come online recently, which I think it’ll help them a lot. Yeah, but our average transaction recently on CD Valet, it’s 50 to 100 grand. Typically in our the big campaign we did at Seattle bank recently is 95 grand. You know, these consumers are moving a lot of money, and so having that trust and that good experience is critical because, because that’s a lot of dough
Sarah Cooke
Yes, it is. So you can spread that over hundreds and 1000s of accounts. So your report also found that approximately 42% of CD rate changes were increases, even though the Fed funds rate did not change last meeting. So what’s and we’re still seeing fluctuations in the yield curve. Why is this happening? What does this indicate? How should credit unions be, react and respond?
John Blizzard
So that’s a great question, and it’s always an interesting one. I’m kind of economics nerd a little bit, and you know, there’s a little bit of disconnect, like the banks don’t just price off what the Fed’s doing. They can be with each other. For those consumers, plus retail deposits are a lot more important to the banks and credits than going borrowing from the Fed or wherever. And there’s different strategies. So you saw it over the last probably two years as expectations of rates coming down a year and a half that a lot of the bank screens do all have the same strategy. They’re having their best CDs price short and anticipate, anticipation Fed’s gonna lower rates. I would say, hey, in a general we don’t actually know what they’re gonna do. The Fed in their own predictions is, is not accurate almost 100% of the time when they’re projecting out multiple years, because nobody can predict the future, and so there’s different strategies. So that’s one of the things we recommend, is look at the curve. We have an intelligence tool that a financial institution could use, the CFO group, or whoever’s setting pricing, and they can look for the areas on the curve compared to everybody else. Hey, where can we be most aggressive and pick up business? Because others have all chosen to be in six months. The other thing is, you know, as we’ve had a inverted yield curve, I mean longer term rates were lower than short term rates, which is not the norm that’s been correcting itself. And I think we’ll, we’ll see what happens. But a strong economy, it’s been resilient so far, could certainly make long term rates go up more and but of course, if tariffs and these things lead to more of a recession or something, we could see rates across the board go down. So it who knows, but you got to pick your strategy. It’s got to work with your asset liability management as well, but lots of opportunity to look at the data and say, Hey, is it a nine month where I want to be competitive 18 month? Because you also want to take into account, and this is often missed, is what’s the cost to acquire that customer? If I can be aggressive at 18 months versus nine, I only have to get that. Customer for one time. Pay for one time, because you’re not going to keep them all. They want a good deal, and so you’re going to have some runoff. And so you just got to think through, you know, like a really strong rate for three months. You know? I don’t, I don’t know. I don’t see how that really works, other than a retention tool for existing customers, but looking for the spot on the curve to be is critical, and it evolves all the all the time.
Sarah Cooke
Yeah, for sure. And so we, I always give my guests the final thought as we’re wrapping up here. So I’m going to allow you what is your final thought Do you want to leave our credit union audience with?
John Blizzard
I would say, you know, it’s like, find ways to be competitive in a digital world that’s just getting more digital every day, on the marketing side, and how people consume and buy products and try things out, and you’re going to have need to try multiple things as A as a community institution, to go compete digitally, and it can’t be you’re just buying, you know, the side of the bus, you know, with your logo on it, and some of those things, which are great, but from a marketing standpoint, you really got to invest in different channels to get new customers, because it’s going to get harder, not easier, for any community bank or credit union
Sarah Cooke
Absolutely well. Thank you so much for your time today. John, appreciate it.
John Blizzard
You bet. Thank you. All right.