TRUMBULL, Conn. -
The new products were created to assist members in preparing for costly events, while helping them avoid financial hardship, such as credit card debt, while paying for them.
“The majority of Americans are unprepared when it comes to savings, especially when it comes to unexpected expenses,” said John Keet Jr., CEO of Personal Care America FCU.
Keet said that most Americans live paycheck-to-paycheck, which can cause financial stress when faced with an additional unexpected expense.
“Sometimes that forces them into alternative borrowing means,” he said. “We’re trying to create a mindset where the members get into a systematic system of savings for specific events that may come up in their life.”
The new savings accounts are open to any current member of the credit union or any person eligible for membership. The accounts earn a dividend rate 1% higher than the traditional 12-month certificate of deposit.
Also, any member who enrolls will meet with a credit union representative to assess his or her current financial status and then will work with that representative to create a customized plan for their future. In addition, the first 100 members that enroll and deposit $500 in one of these accounts will receive an automatic bonus of $100.
The three new savings accounts are: G.R.A.D. (Getting Ready For A Degree), H.O.M.E. (Home Ownership Made Easier), and P.A.C.E (Planning Ahead for a Cash Emergency.)
“Each of these accounts come with a requirement that the member chat with a credit union representative to let us get a feel for what their financial position is and to give them counseling to help them toward their goal,” Keet said.
In addition, the members are given a list of what events qualify for withdrawal, Keet said. For example, with the P.A.C.E. account, events include: unexpected illness, job loss, loss of a spouse, unexpected home repair and auto repairs.
G.R.A.D. is a savings account that is available to members wishing to save money for future education.
It can be used personally for the individual or for any family member.
The money collected in this account can be used for educational expenses including tuition, books and registration fees.
H.O.M.E. is an account designed to help buyers save money that can be applied toward the purchase of their first home.
The home must be purchased in the name of the account holder. Covered costs include down payments, inspections, mortgage fees and closing costs.
“We were doing a lot of loans for young first-time homebuyers who really didn’t have a handle on what was involved,” Keet said. “When we started explaining closing costs, etc. their eyes got as big as saucers and they became disheartened.”
P.A.C.E. provides a way for members to save money for unexpected cash emergencies that might otherwise deplete traditional savings accounts or be paid with credit cards.
These events include job loss, auto or home repair, or family illness.
“‘Planning’ was an important part of that word,” Keet said, of the P.A.C.E. account.
“We’re really looking to put our members in a position where they don’t have to go to more expensive avenues, or in worse-case scenarios, not being able to pay their rent,” Keet said. “We believe that our primary function is to educate our members and improve their financial standing.”
Personal Care America FCU has about 3,100 members and $12 million in assets.
“We’re not a large credit union, but we try to act like one,” Keet said.
Personal Care America FCU used these ads at left to promote its Planning Ahead For Cash Emergencies and Getting Ready For A Degree savings programs.
