BY ALEC HOLLIS
What does the recent interest rate hike mean for your credit union? These statistical analysis measures and account traits could indicate the likelihood of withdrawals in the weeks and months ahead in light of the increases. Coupled with expertise, culture and excellent customer-centric services, they could mean the difference between faltering and thriving.
The first Federal Reserve interest rate hike in nearly a decade is behind us. The Fed recently increased its target rate to between 0.25 percent and 0.50 percent, resulting in the long-awaited first stage of “liftoff.”More rate hikes are widely expected throughout 2016 and will eventually impact every financial institution in the country.
With higher rates almost certainly in store this year, the topic of deposit outflow has received heightened attention. This focus is particularly due to the combined impact of rising rates and new technology making it easier to switch accounts.
Given that the Fed funds target rate remained unchanged for so long, the prospect of higher rates begs the question: What adjustments to the retail deposit rate structure are warranted?
While this question may seem like a daunting game-theory scenario when budgeting and planning, readdressing the tools available to analyze depository funding characteristics may provide some relief.
