TUKWILA, Wash. - BECU is offering 7.5% rates on the first $500 of eligible members' checking and savings accounts in a bid to attract new money, cement relationships with members, promote savings-and even save the credit union a little money.
Gary Oakland, BECU's CEO, told The Credit Union Journal members qualify for the new rate if they agree to receive e-statements and either enroll and remain active in free online bill pay, or have recurring direct deposits into their checking accounts. In addition, "Early Saver" accounts for members under age 18 automatically qualify.
"The 7.5% rate went into effect for those who meet the requirements, plus the Early Savers, on Oct. 15," Oakland explained. "There were about 40,000 checking and savings accounts that met all requirements, along with about 50,000 Early Savers, so 90,000 accounts were auto-converted."
There are approximately 200,000 BECU accounts that are one or two relationships away from qualifying, he continued. The credit union has sent these members notices telling them what steps they need to follow to get the 7.5% rate.
Balances above $500 in the various accounts will receive the regular dividend rates: 1.75% for savings, 0.5% for checking, Oakland said. "We are trying to let people know there is value in savings. Sometimes, those first few dollars are the toughest. But we want to encourage savings, and once they reach $500, they could start over with a CD."
BECU will realize a cost savings from converting members to e-statements, and increase "stickiness" with direct deposit, Oakland said. However, he said the new rates "reward all members, and encouraging the discipline of savings is why we're here."
The $6.5 billion-credit union serves 460,000 members and is the largest in the Evergreen State. Oakland said BECU will review the interest rate bonus on a regular basis and might alter it depending on movement of the Federal Funds Rate or other market conditions. But the intent, he added, is to "keep it at this type of spread over our normal rate."
"This is not a one-time thing. It is a stepping stone to our members developing a long-term savings pattern that will benefit everybody in the long run. We're really excited about it and think it will make a difference in people's view of savings."
