LENEXA, Kan. (4/24/14)--As a way to help its members develop ever-important emergency savings, $1.8 billion-asset CommunityAmerica CU is offering an interest rate nearly 34 times higher than the national average on one of its savings accounts.
The High Interest Savings Account at Lenexa, Kan.-based CommunityAmerica CU pays nearly 4% interest on the first $1,500 deposited (Kansas City Business Journal April 22).
The high rate serves the organization's not-for-profit cooperative structure and focus on financial literacy, said Rob Persaud, CommunityAmerica senior vice president of marketing.
The higher interest rate serves as a great differentiator for the credit union, Persaud said. "You just don't see anything like this high-interest savings account anywhere," Persaud told the Kansas City Business Journal. "But the nice thing about this is many of the people who join to be a part of this end up with free checking, where many of them came from banks that didn't offer free checking. It's a huge complaint consumers have that a basic account like checking isn't offered free, but we offer that here."
The program has helped the credit union gain new members, Persaud said. The credit union sees the high savings rate as a marketing expense that benefits its membership financially, Persaud said. That's a great fit for CommunityAmerica CU's not-for-profit structure, because management is not accountable to shareholders, but rather directly to its membership.
Therefore, the credit union focuses on building relationships with members. "That's where we feel we can also bring value, whether it's your mortgage, your auto loan, your home equity loan or a credit card," Persaud told the Journal.