GreenState Credit Union has launched a Rainy-Day Savings Account program to help clients save for emergencies.
CNBC reported in 2022 that 56% of Americans would not have enough money in savings to cover an $1,000 emergency expense. GreenState Credit Union launched the product to help combat this dilemma.
“We understand that it’s difficult to get into the habit of setting money aside. So we built a product that automates the process and creates the habit for them,” said Jim Kelly, chief marketing officer, in a news release.
Launched in December, the Rainy-Day Savings Account service ensures that 2% of every deposit made into a checking account will automatically move to the Rainy-Day Account where it earns interest. Over time the balances grow and a nest egg or “emergency fund” is established.
“The member can access their funds at any time with no fees, but what we see so far is that the funds remain in the account and grow,” Mr. Kelly said. “It’s the old “out-of-sight, out-of-mind” that makes this effective. When the unexpected expense arrives, these members will not necessarily have to rearrange their budget or go into debt. They will be ready. It’s back to the basics of paying yourself first.”
Since its launch in December, over 500 members have chosen the account. Balances have already grown to just over $500,000. GreenState has a goal to help over 10,000 members build the habit of saving in the first year of the Rainy-Day Account.