COLORADO SPRINGS, Colo. — Ent Federal Credit Union here has a developed a savings product designed to help beginner savers-and those with limited resources - build up an emergency savings account in a short amount of time.
The "My Savings Builder" certificate was launched in August to encourage beginner savers to build an emergency savings fund by offering members a higher dividend rate than traditional certificates, a low-start up deposit of $25, an automatic transfer feature, and dividends that post monthly.
The product came out of work done by an Ent FCU team charged with fulfilling the CU mission of "people helping people," said Cathy Grossman, the $2.8-billion CU's director of corporate communications.
"Our goal was really to get our members to save $1,000," Grossman told CU Journal. "We decided that first we needed to make sure our members knew about automatic transfer. We have 197,000 members and less than 500 members were using this tool-so very low awareness.
"Then the team looked at some Filene i3 ideas, and we put a survey for our members on our website asking them what motivated them to save. Our goal was to help members save, not to build a program or one particular product."
The choices on the survey were cash incentives, higher interest rates, rewards, or discounts on future loans. "Higher interest rates" was the most popular response.
Ent FCU is marketing its new savings program through statement stuffers, in its quarterly newsletter and on posters throughout its lobby. It is also publishes tips and information about savings on its website.
The CU hopes to open 1,000 of the My Savings Builder accounts within one year. In the first month, 111 certificates were opened, 39 with the minimum amount of $25. "The goal is really to help particularly the person who is not saving, to save a $1,000 emergency fund, and then build on to it for some financial security," Grossman said. "We did not establish an ROI. And for the cost, it's just what the cost would be if more people try to take advantage, and it's a very minimal cost. We're using existing programs. To mitigate the cost, we started with a similar program and just made changes to that. And because it's driven primarily by the interest rate, it can be adjusted up and down with the market."
Getting people to save in today's economy has not been too much of a challenge for the credit union, Grossman said. "We actually had an increase in deposits in the past year," she said. "It's a flight to safety, instead of putting money into investments that may not be insured."
For other credit unions looking to motivate their members to save more, Grossman said there is a variety of methods they can use, but "the important thing is to survey their members and see what motivates their members."
