IRA Offerings help Raise Average Share Balances

Taxes were due last Thursday and many of those lucky enough to receive large refunds will look to put their money in an IRA acount. The percentage of credit unions able to provide such a service has steadily risen over the last five years from 55% to 60% of all institutions.

 
 

Taxes were due last Thursday and many of those lucky enough to receive large refunds will look to put their money in an IRA acount. The percentage of credit unions able to provide such a service has steadily risen over the last five years from 55% to 60% of all institutions. Providing members with the option of opening an IRA account helps the member have a full range of service offerings, but it also helps the credit union increase average share balances and potentially lengthen the duration of their funds.

The average member currently holds $6,429 in savings at their credit union. The average balance of an IRA account, however, is $10,577. Without these account balances, which provide longer terms and generate larger deposits, average share balance at credit unions would be almost $600 less, a decrease of 8.7%.

Having high average share balances can help promote internal share growth during slower periods, increase operational efficiencies through economies of scale and provide longer-term funds for innovative lending strategies. The table below shows the top 10 credit unions by IRA balances as a percent of total share balances.

As of December 31, 2003
Based on all CUs over $50 Million in assets
Rank
St
Credit Union
IRA as a %of Shares
Avg ShareBalance
ShareGrowth
OpExp/ Avg Assets
Assets
1 MA Members Plus
48.26%
$16,396
3.63%
2.20%
$210,352,995
2 NY Lufthansa Employees
31.24%
$40,163
2.30%
0.65%
$69,386,757
3 WI Emsbla
29.95%
$12,130
0.78%
1.98%
$98,688,256
4 CA Parsons
28.37%
$13,470
13.54%
2.03%
$121,813,511
5 NJ Merck Employees
28.28%
$35,241
21.62%
0.47%
$1,029,496,254
6 MA Nations Heritage
27.43%
$6,539
1.16%
3.86%
$90,185,726
7 AL Heritage South
27.18%
$4,761
9.60%
2.77%
$50,112,375
8 MS Mississippi Telco
26.55%
$8,747
7.55%
1.85%
$96,881,469
9 TN Kimberly Clark
25.07%
$5,668
5.71%
3.87%
$70,119,975
10 MA Southern Mass
24.93%
$11,940
5.00%
2.60%
$113,314,085
Averages for 10 credit unions:
30.14%
$16,878
13.53%
1.40%
$195,035,140

 

 

 

 

April 19, 2004


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