Market Volatility: Why Emergency Funds Matter More Than Ever
Recent stock market volatility, driven by new tariffs, is a reminder that 401(k)s and investment accounts are meant for the long term—not for unexpected expenses like car repairs or medical bills. That’s why a strong emergency fund is essential, offering immediate, reliable support when life throws a curveball.
Read on to discover how your credit union can help members build financial resilience with an emergency fund. As a core pillar of financial health, even a modest emergency fund can provide stability in today’s uncertain economic climate.
Why Emergency Funds Work
Emergency savings create a crucial buffer between your members and financial disaster. Even $500 set aside can mean the difference between an overdraft and peace of mind. It keeps people out of high-interest debt traps and improves overall financial well-being.
Right now, with markets in flux, members may feel rattled. They may even be tempted to withdraw from long-term investments. But that’s where credit unions can provide education and guidance: reassure members that market corrections are normal and emphasize that retirement accounts are for later. What’s needed now is a short-term safety net.
Help Members Make Their Money Work Harder
For members just getting started, make sure they know that not all savings accounts are created equal. A high-yield savings account offers better returns than a standard account—and credit unions can often offer rates that rival or beat online banks. It’s a great way to help members grow their emergency fund faster, without taking on risk.
Encourage members to open a dedicated high-yield account specifically for emergencies. When it’s separate, it’s less tempting to dip into—and more likely to be there when they truly need it.
How Credit Unions Can Help
You’re in a unique position to guide members through turbulent times. Here are a few ways to support them:
Create member campaigns around building an emergency fund—start with $100, then $500, and eventually a month’s worth of expenses.
Use automated savings tools to help members squirrel away small amounts regularly.
Embed financial education in your microsite or app (like those powered by Ovation) that explains the difference between long-term investments and emergency savings.
Link savings incentives to behavior—like a match for opening a designated emergency savings account.
The Win-Win
Emergency fund savings aren’t just good for members—they’re good for credit unions too. Deposit growth, improved member engagement, and deeper relationships all follow.
As market uncertainty persists, now is the perfect time to lean in. Give members the tools to protect themselves—and strengthen your institution in the process.
To learn more about how Ovation can boost your financial wellness strategy with modern tools and resources for your members, schedule a consultation with us today.