OBJECTIVE: Generate deposits
though high rate/high minimum balance money markets.
Situation Profile:
AmeriChoice Federal Credit Union introduced a high
rate/high minimum balance money market account based
on Raddon Financial Group’s (RFG’s) recommendation.
The goal for introducing the high yield/high balance
money market account was two-fold. Financially,
AmeriChoice was in need of deposits. However, they
did not want to attract the money through above
market rates on certificates because of the type of
member it draws as well as the narrow margins.
Secondly, they felt that they needed a way to combat
the online financial institutions, such as ING, to
retain deposits that were flowing out due to
interest rates.
After examining their membership demographics and
balances, AmeriChoice created a Premier Money Market
account on October 4, 2006. RFG’s research
demonstrates that each account will have balances
that are approximately two times the minimum balance
that is required. Therefore, AmeriChoice set the
minimum balance for their account at $50,000 with an
interest rate of 5% APY. They set a goal of $3
million in deposits within the account.
The creation and implementation took a very short
period of time. AmeriChoice advertised the new
account in the local newspaper in November. They
also sent a letter to their current money market
account holders, who had $35,000 to $45,000 in their
regular money market in hopes they would add money
from another financial institution to open a Premier
Money Market account.
Results:
This project was a success. At the end of February
2007, only 5 months into the rollout, the statistics
were as follows:
Number of
Households
31
Number of Accounts
33
Balance of all
Premier Money Market accounts
$3,894,116
Average balance of
each account
$118,004
Average number of
services per household
4.9
Average account
profit per household
$643
With AmeriChoice’s
vision of “Building Relationships for Life”, they
have certainly provided a valuable account service
to their members and strengthened their
relationships. More importantly, they were able to
get the money that they needed for less than CD
money.
At RFG we take pride in
providing research-based solutions that are
effective and easily implemented. We are dedicated
to exceeding our client’s expectations and ensuring
that they receive value from their relationship with
RFG.
Since 1983,
Raddon Financial Group (RFG) has provided primary
research and marketing solutions to the financial
services industry. Headquartered in Lombard, IL, RFG provides research solutions to over
1,000 financial institutions nationwide.
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AmeriChoice Federal
Credit Union Mechanicsburg, PA
