AAA FCU (South Bend, IN)

AAA Federal Credit Union now offers a Drive-Up Savings.  When you get a new vehicle loan with AAA FCU you can now add a Drive-Up Savings.  A Drive-Up Savings is a Certificate of Deposit that has the same rate (APY) as the rate on your loan (APR).  You can deposit up to 10% of your monthly loan payment into your Drive-Up Savings.  For more information about our Drive-Up Savings contact one of our three offices. (http://aaafcu.com/loans)

MidWest Financial CU (Ann Arbor, MI)

Drive Up Savings

Add it to your new MidWest Financial auto loan and watch your savings grow!

How It Works*

Auto Loan:	$20,000 for 60 months at 5.75% APR
Monthly Payment:	$384.40
Drive Up Savings:	You deposit additional funds, up to 20% of your monthly payment
Monthly Deposit:	$76.88
Savings Rate:	5.75% (same rate as your auto loan; that’s 5.90% APY*)

Over the life of your loan you will have saved:
12 months – $947.38
24 months – $1,950.71
36 months – $2,936.39
48 months – $4,139.06
60 months – $5,253.93

*APY= Annual Percentage Yield. All rates and figures for example only. Savings rate effective while loan is in repayment and good standing only. Subject to credit approval. To qualify for Drive Up Savings, borrower must use electronic payment for the loan payment and savings deposit. Withdrawal restrictions and early closure penalties may apply. Membership eligibility required. Please see a Representative for details. (https://www.mwfcu.org/services/savings)

Fiscal Credit Union (Glendale, CA)

DriveUp Savings

Get an Auto Loan…
Get a Term Share Certificate…

AT THE SAME RATE!

When you get a new or used car loan at Fiscal, you can open a term share certificate at the same rate.* Select your monthly contribution amount to be automatically transferred into your term share certificate account every month and start saving at a higher rate today.

For full details, call (800) 311-3328 or stop by your nearest Fiscal branch.
(www.fiscal.com/index.cfm?fuseaction=view&CID=97)

Tarrant County CU (Fort Worth, TX)

Get an Auto Loan…Get a Savings Account…AT THE SAME RATE!

Everyone wants to save more money. Very few of us find that to be an easy thing to do. That’s why we are happy to introduce you to a new way to help you save. It’s the DriveUp Savings account . . . (www.tarrantcu.org/news-and-events/2009-02-01-driveup.php)

Michelle Peterson, a member of the working groups that ignited the DriveUp Savings and Skip N Flip Savings programs reports that she has launched the ViaStart Up Certificate at Via Credit Union. The product takes elements of both programs and simplifies the product into one easy to understand product that is also easy for the credit union to efficiently maintain.

Staying in control of your finances is never easy, but the difficulty of it soars in a tough economy. One of the smartest things you can do is to have an emergency fund. Via Credit Union is here to help make building your emergency fund easier with the ViaStart Up Certificate.

• 12-month certificate
• $10 minimum to open
• Monthly deposits are required
• Funds transfer to Membership Shares upon maturity
• Dividends are compounded and paid monthly 

This product takes a central component of both the DriveUp Savings and Skip N Flip programs; being the encouragement of building yoru savings through installment-like payments. Currently, Via is promoting it as a way to establish an emergency fund, a central element of the Skip N’ Flip Savings.  

The rate as of 10/20/2009 is 1.71% APY. (1/70% Dividend Rate). A penalty of 60 days’ dividends on principal withdrawn, whether earned or not is applicable on early withdrawals.

Related: Via CU Stuffer

We love the colloboration and ideas from Filene, I3 and others such as your group!  I will get results to share with you in the future . . . our Indirect Lending program has doubled their volume in 1st quarter 2009.   . . . a lot of people are looking to refinance their autos and lower their payments and save money during these tough economic times.  So the time is right for Credit Unions to be rolling out and advertising program such as Drive Up Savings. . . people are turning to Credit Unions to meet their financial needs.  Drive Up Savings is one of the programs that helps us do that!

They’ve added a special feature that I have seen some other auto save programs allow. Members can make two withdrawals per year to pay insurance premiums. In this way, it acts as a self directed insurance premium escrow account, but earns a good rate while doing so.

Here’s more from the Hughes Website:

Here’s how it works. When you open an Auto Loan with us, just tell us you want the Drive Up Savings added. If you already have an auto loan with us, let us know that you’d like to start a Drive Up Savings account. Then we’ll work with you to determine an additional monthly contribution amount that goes into your savings account. With each payment, we’ll apply the full loan payment amount and put the contribution amount into your Drive Up Savings account. Just think of the savings you’ll have by the time your loan is paid off! Make it automatic. Sign up for Direct Deposit and Auto Transfer for your payment—it’s safe, easy and convenient.

Just $20 per month can help you buy your next car and/or save for major repairs. You could use your savings to pay insurance premiums twice a year. Or, talk to us about the many other savings and investment opportunities that are available to you as a memberowner of Hughes.

. . . some of the most innovative approaches to auto lending in a down market are cropping up at small CUs. $7 million Members United Federal Credit Union of La Porte, Ind., for example, is piloting a program called “Drive-up Savings” that allows members to link a car loan to a savings account and offers them the same rate on the savings account that they are paying on a car loan.

“This is a wonderful product,” Probasco enthuses. “It breeds savings.” For members who are struggling financially, it builds up a savings balance they can’t touch until they trade in the car, finish paying off the loan or need to make authorized repairs to the car. They’re likely to build up money they can eventually reinvest or use as they see fit. And having the savings account can help them raise their credit score and make future borrowing less expensive, she explains.

INDIANAPOLIS (12/2/08)–Indiana Credit Union League’s ignite initiative is making progress, and innovations begun at the start of the year by the ignite working group are ready to be implemented in credit unions, says the league.

Several Indiana credit unions have committed to offering the innovations, and working-group members are seeking additional credit unions to adopt them, the league said.

“To stay in touch with all that is happening with ignite, we have established a website, www.ignitecu.org,” said Doug True, league director and leadership team member, and senior vice president technovation at FORUM CU and president of FORUM Solutions.

The site serves as an information center for ignite projects and as a social networking site. The credit union community nationwide can join the network to keep up with the developments, True said.

One credit union that has adopted an ignite innovation is Lafayette-based Purdue Employees FCU, whose CEO Bob Falk, is a member of the ignite leadership team. Purdue is implementing DriveUp Savings, which allows borrowers to open a matching-rate savings account at the same time they close on their auto loan.

“This product has merit not just for our members, but for credit union members everywhere who need a little extra incentive to save money,” Falk said.

. . . In the DriveUp Savings product, members open a savings account, such as a certificate, at the same time they close their auto loan. The loan officer and member agree on a monthly contribution amount and through automated electronic transfers, the DriveUp Savings is funded at the same time the auto loan payment is made.

Is your CU ready to DriveUp Savings? Or, have you implemented it already? Contact us and let’s get the wheels rolling!

• [THE CU MISSION]
  This product targets the moderate means consumer. Most often, institutions require a high opening deposit to “play” in the high savings rates game. For this target group, even a $1,000 opening balance is difficult to produce. This product allows the member to
  • Obtain a high rate
  • Develop a savings habit that systematically builds a savings balance
  • Enables the CU to market to the member as they near the loan/savings maturity to offer them more “advanced” savings accounts (at this point, a $1,000 certificate might be of interest to the member since they now have that amount in all likelihood).      

• [RECOUPING COSTS/ACCOUNT RENTENTION]
  Loans will stay on the books longer. Members are less prone to Auto Loan Recapture (ALR) and refinance offers from other FIs because they would lose that savings rate if they closed the loan. It would be much easier to take the $50 offer from the other FI if my savings rate was a miniscule 0.25%APY rather than 8%APY. Since you are earning interest on loans longer, you can return some of that value to the member for the desirable behavior.      

• [ACCOUNT ACQUISITION]
  If you were comparing two FI’s offers and the rates are the same (or very close), would you take the one that also enabled you to save at 8% or the one that gave you a .25%APY Savings account? Even more important, which one would you tell your friends about or blog about (Net Promoter Score anyone)?      

• [PUBLIC RELATIONS]
  No media source will do any piece on another low-rate savings product. However, they might do a piece on an institution who makes it a mission to return value to member-owners through a high-rate savings program that teaches financial savvy while integrating itself into the lifestyle of their consumer.      

• [RETURN SALES]
  I equate this to the “same store sales” measure that the restaurant and retail industries use for determining the ongoing value of their stores. CUs who have implemented this program and those similar to it report that their members are coming back for other smaller loans that aren’t auto loans or have savings programs tied to them. My thought here is that these members were banking elsewhere but came to the CU for their loan because they wanted the savings offer. It gave the CU the chance to earn the member’s future business through streamlined applications and superior service.      

• [INDRECT LENDING]
  If your CU is involved in indirect lending, this product serves two critical functions.
  • 1.) It gives you something to market to the member who originates their loan at the dealership and potentially increase wallet share with that new member
  • 2.) It gives the member less incentive to be redirected to another FI while they are at a dealership

She reports that her credit union is still doing about a 30% takeup rate (meaning 30% of the auto loans they open have a DriveUp Savings attached).

She also included a cell phone sticky pad that was used as a give-a-way at her local chamber meeting. What a great idea!

Thanks for keeping us updated Carolyn, and congratz on the great success you are having with the product.

If your credit union is intersted in launching this product or a similar product, we want to hear from you so we can add it to the growing list of credit unions offering the product. We’ve started to draw interest from credit unions in California and New York, so we may see the innovation take off nationwide soon!

And remember, we’re also happy to help you as an advocate if you need help getting it approved, implemented and/or promoted. Just contact us and we’ll help you get started.

Six credit unions in Indiana have launched a cool looking program that helps members save when getting a car loan. Not only does the program help your members build up their savings, it has the additional impact of increasing the CU’s deposit balances.