The state of credit union investments in 2Q 2020

Investment balances were up 19.2% from the first quarter as consumer uncertainty powers growth in core deposits.

As of June 30, 2020, credit unions held $533.8 billion in investments — that’s up 19.2%, or $85.7 billion, from one quarter and is the largest quarterly dollar increase on record. Notably, portfolio growth from the first to second quarters has been negative since 2011. Not so this year, which underscores the highly unusual dynamics at play in 2020 as well as the sheer volume of liquidity coming into credit unions.

The economic uncertainty related to COVID-19 continued to encourage significant share inflows as members sought safe havens for their assets. Total deposits increased 8.1% from March 31, 2020, and 16.2% from June 30, 2019.

The deposit accounts with the largest growth have also shifted drastically in 2020, reflecting consumer sentiment and the rate environment. Core deposits — which includes checking, savings, and money market accounts — accounted for 105.0% of inflows. How did core deposit growth top 100%? Certificate accounts contracted.

 

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