RALEIGH, N.C. – When it comes to serving the important yet elusive young adult market, Coastal Federal Credit Union thinks it has hit a bull's eye with its new Student Banking program.
"America's youth wields tremendous economic power; they spend nearly $160 billion annually. Yet, historically, very few financial services have been readily available to them," said Larry Wilson, Coastal president/CEO. "While the marketplace has transitioned to debit cards and online banking, anyone under 18 generally has been limited to traditional savings accounts. Likewise, despite the fact that they are earning and spending billions of dollars, teens are missing out on opportunities to learn about managing their money responsibly."
With an emphasis on meeting their needs, the program is also designed to provide teens and young adults with the resources to develop their money management skills.
Recommended For You
"We had a few pieces already in place to serve this market but we really spent a few months just looking at it all and gathering everything together under one umbrella and brand," said Coastal FCU Community and Corporate Relations Director Joe Mecca. "It was important to us to roll out more than just a checking account but something more comprehensive that covers all the bases."
In addition to giving students the opportunity to open a checking account, complete with a Visa check card and access to all the same benefits of a regular "adult" account, the program also includes a special 12-month student certificate at a rate of 4.00% APY. Available to members 21 years old and younger, the CD has a $100 minimum deposit, with unlimited additional deposits in $100 increments. At maturity the special 12-month CD will roll into savings.
Young adults ages 18 to 21 years old will also have the opportunity to establish credit early with the Coastal Student Infinity Visa card. According to Mecca, as a joint ownership account, the credit card offering helps parents have peace of mind knowing that their child is handling their finances responsibly while maintaining a degree of control.
"We'd been getting requests from parents and teens about a debit card and that later evolved into developing a product line specifically for younger members that would give them full access to our services," said Mecca. "At the same time we realized it could also be a tool to work with parents on how to use the products responsibly."
To help parents start discussions about finances and money management the credit union developed and released booklets entitled Straight Talk About Money. The informal booklet provides tips on guiding teens toward responsible financial behavior.
In addition, students who sign up for new accounts will receive a free subscription to brass|CU, a quarterly lifestyle and money management magazine written for and published by young adults.
"The magazine [brass|CU] gets the message about money out there better than if it was just coming from us," said Mecca. "It's their peers who are speaking from their own experiences and they can see the real value in saving, investing, building good credit etc.-whereas it might sound like preaching or selling from us or someone older."
Young adults will also have access to a Student Banking section on Coastal's Web site (www.coastalfcu.org). Linked from the main page, the new section features a variety of educational tools and money management resources for lifestyle milestones ranging from "My First Car" and "Starting College", to "My First Job". The site also offers quick tutorials on topics like how to use a check card under the heading "Guides to Independence." Students who take the courses get a free iTunes music download.
Credit union representatives are also on hand to work one-on-one with students and their parents to help answer questions and address their individual needs. Coastal also offers a free youth financial education program for schools and youth organizations.
"Financial literacy has always been a board priority so we are lucky that they've always recognized the importance of helping younger members," said Coastal Deposit Product Manager Jeff Borcik. "My advice for credit unions is don't put restrictions on kids. If they have parental approval for an account give it to them. There is always apprehension in giving a kid a debit or a credit card, but where else can they learn about using it responsibly? If their credit union doesn't teach them then they learn the hard way."
Mecca adds that education has to remain the focus and that ultimately it will not only make for better consumers once they head out into the real world, but it will result in better members.
Coastal must be doing something right, in just a few weeks, without a big promotional push, student CDs have brought in $90,000.
Mecca says just in time for Youth Week, the new program is now being promoted via several channels, from in branch messages on its plasma screens and its newsletters, to its Web site and direct mailings of Straight Talk to some 24,000 members that have children in the 12 to 18 year old range.
© Touchpoint Markets, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more inforrmation visit Asset & Logo Licensing.
