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Credit unions share their deposit pricing strategies
As the Federal Reserve Board has increased short-term interest rates over the past three years, many banks and some credit unions lagged in boosting the rates they pay on savings accounts, money market accounts and certificates of deposit. Today, however, the competition for deposits is not just that bank down the street, it comes from online vendors. With more rate hikes are scheduled during the remainder of 2018, how will credit unions respond? Credit Union Journal asked attendees of the recent CUNA CFO Council conference to share their pricing strategy and to discuss who they see as their deposit competitors.
Brian Clarke, CFO, $7.8 billion Bethpage FCU, Bethpage, N.Y.
We did not want to get into battles on CD specials, so we raised our money market rate to 1.25 percent in December, and then 1.50 percent in March. In money market we have $2 billion in deposits. By doing it this way, all the members benefitted, not just the ones paying attention to CD specials. There was a cost, of course, but we had really strong first quarter deposit growth. The hope is to improve loyalty.