The $330 million credit union is currently offering 3.01%, "compared to 1.8% or 2% on the highest CD in our market," said CEO Jerry Kinlock, and that includes no minimum balance and a rebate for ATM fees.
"We could actually pay more, but that'd probably cause skepticism," Kinlock said.
Kinlock's credit union (www.sactocu.org) is a user of the REWARDChecking account program from BancVue Ltd., a program that utilizes a dashboard-based system to keep track of how many electronic services an individual member or customer uses each month and then report that usage in numerous dynamic ways to client credit unions and banks.
"The whole idea behind this account is to use the savings and efficiencies that credit unions should be getting after they've invested so heavily in all this technology," said Don Shafer, the Texas company's chairman and "chief evangelist." The goal is to motivate members to use this technology, he added.
Consumer use of the special checking account is monitored by staffers at BancVue, who alert the client when members or customers fall below client-set thresholds, such as 12 debit card transactions a month or whether a member actually downloaded e-statements or how much in ATM fee refunds should be paid out.
If a member falls below a threshold, BancVue alerts the credit union, which can then alert the member and encourage him or her to rectify that in the coming month.
"Everyone's been delighted with how this has worked," Kinlock said, adding that BancVue consultants help his staff understand consumer behavior and how to encourage stronger uptake of electronic products.
According to BancVue, the average free checking customer maintains an average balance of $1,200 and makes about six debit card transactions a month. The average REWARDChecking user maintains an average balance of about $8,500 and uses a debit card 20 times per month.
Also, the company said, more than 80% of REWARDChecking users use direct deposit and e-statements, compared with less than 25% of free checking users on direct deposit and only about 1% receiving e-statements.
As for online banking itself, nearly 90% of REWARDChecking customers and members use that channel, compared with about 25% using free checking.
Kinlock cited similar numbers at his credit union and said BancVue's behind-the-scenes software is giving his credit union the ability to compete in a market that is saturated with major competitors such as Bank of America and The Golden One Credit Union.