No Lag Time at Southwest with Rate Change

DALLAS – Southwest Corporate FCU members will see an immediate rate jump on their overnight funds due to the Fed’s recent rate hike. The Fed raised its interest rate target to 3.75 last Tuesday-the 11th straight increase in the past 15 months. Southwest Corporate’s top overnight rate has already been paying a 3.76% yield, and is expect to bump upward following the Federal Reserve’s announcement. “There is no lag time between action at the Fed and re-pricing our overnight fund accounts,” said Cynthia Shi, Director of Portfolio Management at Southwest Corporate Federal Credit Union. “We re-price simultaneously as the market goes up to make certain that our members have the opportunity to make as much on their investible funds as possible,” she said. Shi noted that many credit unions are experiencing tighter liquidity as borrowing increases-due in part because auto manufacturers discontinued incentive financing and relatively weak deposit growth. Credit unions that directed their excess deposits toward longer termed certificates in recent years are no longer awash in cash. When they do have excess funds, they tend to want to keep the money accessible, Shi said. Southwest Corporate’s overnight accounts provide quick access and superior flexibility while offering some of the highest rates available. “We invite credit unions to compare,” Shi said.