Credit unions serve as financial intermediaries to members who need money they don’t yet have (borrowers) as well as those who have money they don’t yet need (savers). As such, they are always challenged with adjusting pricing and value expectations to meet both sets of needs.
Today, after 30 years of ultra-low interest rates, rates are rising. That means credit unions must do some rethinking about how best to serve both their borrowers and their savers.
At the end of this article, you will find four specific ways handling deposits at credit unions could change as interest rates rise. Before we get to that, we’ll take a look at the rate changes we have seen so far and will see in the near future. I will state my case for why we are leaving the era of ultra-low interest rates behind for the foreseeable future.
A Recent History of Rates
Our media are currently flush with reports of the magnitude and evils of inflation. Over the past three decades, inflation appeared to be a thing of the past—a phantom menace.
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