Increase Deposits While Providing a Safety Net for Members
In recent years, a concerning trend has emerged within credit unions across the nation – members' decreasing savings account balances. For credit unions, lower savings balances mean reduced liquidity and a potentially more precarious financial position. For members, it often signifies a lack of financial stability and preparedness for life's uncertainties.
One effective strategy for helping members build financial stability is guiding them in establishing emergency funds. These essential savings serve as a critical safety net, protecting members from financial setbacks while also strengthening the credit union’s overall financial health. By promoting the importance of emergency funds and providing support in creating comprehensive savings plans, credit unions can empower members to achieve greater financial security while fostering long-term member engagement and asset growth.
The case for emergency fund education
When members save more, credit unions benefit from increased liquidity, enabling them to offer more competitive loan rates and expand their services—ultimately enhancing the member experience. Additionally, members with established emergency funds are less likely to default on loans, further strengthening the credit union’s financial stability.
Beyond the balance sheet, prioritizing emergency savings fosters deeper member engagement and financial wellness. A proactive approach to financial education builds trust, which is essential for long-term member retention. Moreover, engaged members who actively save are more receptive to additional financial products and services, creating valuable cross-selling opportunities and increasing member lifetime value (LTV).
Strategies to promote emergency funds
While many Americans are aware of the importance of emergency savings, many struggle with how much to save and how to reach their goals. Credit unions have a unique opportunity to bridge this gap by providing education, tailored financial products, and technology-driven solutions that empower members to build financial security.
1. Education and awareness
Financial literacy is key to fostering better saving habits. Credit unions can host workshops, webinars, and in-branch events to educate members on the importance of emergency funds, how to set realistic savings goals, and effective budgeting techniques.
Beyond live events, digital resources such as blog posts, eBooks, and video tutorials allow members to learn at their own pace, ensuring continuous engagement and accessibility.
2. Specialized savings products
Offering high-yield savings accounts specifically designed for emergency funds can incentivize members to save. These accounts might include:
- Higher interest rates for maintaining a minimum balance
- Bonus incentives for reaching specific savings milestones
Additionally, bundling emergency savings accounts with other financial products, such as loans or checking accounts, can provide a seamless way for members to manage their finances while reinforcing the importance of saving.
3. Leveraging technology to boost savings
Automation is a game-changer for financial wellness. Encouraging members to set up automatic transfers to emergency savings accounts increases the likelihood of consistent saving.
Mobile banking apps can further enhance saving habits by offering:
Automated reminders nudging members to contribute regularly
Personalized notifications reinforcing savings goals
Progress tracking tools that motivate and encourage continued saving
How Ovation supports credit unions in promoting emergency savings
Ovation (formerly Paperwork) is a comprehensive financial wellness platform focused on guiding members through their financial journey. Given how central emergency savings are to financial health, Ovation empowers credit unions with innovative technology to seamlessly:
Send targeted notifications to encourage consistent savings
Offer interactive modules that guide members through goal-setting and contribution planning
Provide members with actionable data-driven insights that reinforce financial security
By combining education, innovative savings products, and technology, credit unions can play a crucial role in helping members build strong financial foundations—strengthening both member relationships and institutional stability.
If you're interested in exploring how Ovation can contribute to the financial wellness of your credit union's members, schedule a free demo today.