Epiphanies and IRA’s
March 2, 2007 – 5:07 pmA few months back while we were planning out our deposit strategy for 2007 and 2008, I just rattled an idea out of my head. No clue where it came from, but I just blurted it out.
Why does our IRA rate suck? (That wasn’t my idea, just my observation.)
The average life of one of our IRA’s is almost in the double digits! So why do we pay low rates on that money? If the average life of an IRA is almost 10 years, what rate would be put on a 10 year CD??
So we’ve developed my IRA idea into our Premier IRA: The Last IRA You’ll Need.
Internally, it will always be priced around our 5 year CD. We launched the product last month, but we haven’t start the promo machine until this month. Our current rate is 4.5% APY with no account minimums.
We’re running with the “Last IRA You’ll Need” because we’re targeting the large number of people who have small IRA’s spread out across a few institutions and want to help our members consolidate their IRA’s and not have to ladder CD’s and manage maturity dates. This way, they have one big account that is easier to manage and their funds are fully liquid! Plus, the NCUA insures it up to $250K now! And at 4.5% we’re way ahead of of our regional IRA savings market and we’re in market for 5 year CD’s.
We’re looking for ways to grow shares rather than promo CD’s and checking, checking, checking. We’ll see how it pans out.
