Savings per member climbed 4.6% during the past year to $9,317 in the midst of record membership gains at credit unions.
Members’ savings surged in June, up $7 billion (0.8%) for the month, according to the August issue of CUNA Mutual Group’s Credit Union Trends Report. This reflected a fifth payroll Friday in June as share draft accounts were also up $4 billion during the month.
“Looking at long-term savings growth trends, we see members have foretold previous economic downturns by growing deposits,” wrote Dave Colby, CUNA Mutual chief economist, in the report. “It is too early to tell if the growth improvement since the end of 2010, especially in the past six months, is a harbinger of further economic weakness.”
Through mid-year, 58% of all savings gains came from regular shares with a current yield of 0.24%, the data showed. Share drafts accounted for 23% of the increase with a current yield of 0.28%.
Money market accounts also accounted for 23% of all savings growth and their national average current yield was 0.40%. Meanwhile, certificates of deposit were down 1.5% year to date. Colby said this portfolio segment has declined in 33 of the last 36 months. With a one-year yield now at 0.93%, it is 53 basis points above a MMA or about half its rate advantage of just three years ago.
Colby said given the growing economic uncertainty, the logical course of action for businesses and households is to take a wait-and-see approach.
“A pause in an economy already running near stall speed is not going to produce a positive outcome,” Colby said. “Helping member households put their finances in better shape [with] debt, access to credit, wealth and cash flow to weather this uncertainty and capitalize on opportunities, will be a good strategy, at least until some of the dust settles.”