How credit unions handle maturing CDs will determine whether they fund growth or just manage decline.

There’s a wave coming, and credit unions know about it but aren’t talking about it in the right way.

Roughly $1.6 trillion in certificates of deposit are maturing across the U.S. financial system over the next 12-18 months, with the concentration heaviest in the second and third quarters of 2026. These CDs were issued in 2023-2024 when rates were higher — many paying 4-5% or above. They’re rolling into an environment where new CD rates are running 30-50 basis points lower, sometimes lower.

For depositors, the math is simple: they want their higher yield. For credit unions, the math is different: if they replace that 4.5% CD with a 4% CD, they’ve just compressed their net interest margin on a deposit that funds their lending portfolio. Do that across the $1.6 trillion wave, and suddenly pricing power and profitability look very different.

This isn’t an academic concern. This is the deposit conversation that’s about to consume every credit union’s executive agenda, and the ones that handle it poorly will be funding less growth, not more.

Why This Matters for Lending

A credit union’s lending growth is constrained by its deposits. Deposits are the fuel for loans. When rates were rising, deposits flowed in and credit unions could be selective about pricing — they turned away expensive deposits because they had enough. Now the math flips.

The $1.6 trillion maturation is a moment of truth: can a credit union convincing its members to accept lower rates on rolling CDs, or does it have to raise rates to keep the deposits from leaving?

If it has to raise rates: net interest margin compresses, and the credit union’s ability to fund growth or maintain profitability gets squeezed.

If it can convince members to accept lower rates: it keeps the spread, but it’s betting that member relationships hold even when the rate proposition gets worse. That only works if the credit union has other value propositions — convenience, service, cross-sell opportunities — that make it worth staying despite lower yields.

Most credit unions are about to find out they don’t have those value propositions as strong as they thought.

The Competitive Pressure Is Real

Digital-native banks and online-only operations are already advertising higher CD rates, trying to capture the rollover wave. A credit union member sees a maturing CD, gets offered 3.75%, opens a browser, and finds an online bank offering 4.2%. The decision is made in five minutes.

Credit unions that respond with “we have better service” or “we’re part of your community” are making a mistake. Those are true statements, but they don’t convince someone walking away from 45 basis points of annual income. The member has already experienced your service — they know you. If that service isn’t compelling enough to offset the rate difference, the rate wins.

The real opportunity for credit unions isn’t to match online rates (they can’t, and shouldn’t try). It’s to use the CD maturation conversation as a relationship-deepening moment. When a member’s CD matures, that’s when you introduce them to your other services, your mobile app, your lending products, or your advisory services. You’re not just asking them to accept a lower CD rate — you’re asking them to engage with you differently.

But that requires systems and structures that most credit unions don’t have set up. So they’ll default to the rate conversation and lose.

What Leadership Should Rethink

Model the deposit pressure now. Don’t wait until Q2 to understand what happens to your cost of deposits if even 20% of maturing CDs roll into a 50-basis-point rate cut. Run the scenario. Know the impact on your lending budget.

Separate the member conversation from the rate conversation. If your only tool for keeping maturing CDs is matching or beating rates, you lose. Create a deposit maturation moment that’s about the member’s financial picture, not just the CD rate.

Don’t confuse member relationships with rate lock. A member staying because they’re loyal is good. A member staying despite a rate cut that they can beat elsewhere is fragile. Build on both, but don’t mistake one for the other.

Plan your lending growth against deposit reality. If your deposits are about to get more expensive or more volatile, your lending growth assumptions need to reflect that. Don’t forecast 7% loan growth funded by deposits that are structurally moving against you.

The Bottom Line

The $1.6 trillion maturation isn’t a problem to solve. It’s a decision point. Credit unions that treat it like a pricing conversation will lose deposits and margins. The ones that treat it as an opportunity to deepen relationships and demonstrate value will keep deposits and grow the spread. The difference isn’t rates. It’s strategy.