Alliant CU Pays to Save With Sponsorship Drawing Thousands of New Members

Alliant Credit Union has found a novel way to encourage savings and draw new members.

To find out how the Chicago credit union ($13.5 billion in assets, 550,400 members) is doing this, CU Times dialed into a recent podcast of Suze Orman’s “Women & Money (And the Men Smart Enough to Listen)” with the financial expert’s co-host and spouse, Kathy “KT” Travis.

The following is a transcript from the podcast:

Orman: Both of us are so proud to have this podcast sponsored by Alliant Credit Union, the home of the Ultimate Opportunity Savings Account. This is where if you simply go to MyAlliant.com, and you simply open an account and deposit at least $100 a month every month for 12 consecutive months, what’s going to happen, K.T.?

KT: Alliant is going to pay you a bonus of $100.

Orman: THAT is a 16.7% return on your money.

KT: And interest. Wait. Tell them about the interest.

Orman: Well, yes. You’ll also be getting 0.55% interest. So if you have a stimulus check, if you have a tax refund, whatever it is, that is the place that both of us want you to save.

Alliant began sponsoring the podcast in early January, and in three months attracted 13,414 new members who opened the bonus-loaded savings account. This month it announced it would extend the promotion through the end of the year.

The new savers so far represent a potential $1.3 million cost, if all of the members meet the bonus requirements, including having at least $1,200 in their account at the end of 12 months.

Alliant President/CEO Dennis Devine wouldn’t share the demographics of the new members, but he said they know their way around a computer or smartphone.

“They are incredibly digitally engaged,” he said. “They opened their accounts digitally, they fund their accounts digitally, they monitor their accounts digitally.”

Alliant, like most credit unions, isn’t starving for savings. Over the past year, savings have been up about 20% among all credit unions, and Alliant’s total shares and deposits rose 11.4% to $11.2 billion last year.

The memberships gain is not inconsequential. Alliant’s total net membership gain over the previous 12 months was 56,725, up 11.5%.

Sponsorships aren’t new, and paying bonuses to draw new members isn’t new.

Devine said the combination of the saving bonus and its placement with the podcast make a perfect fit for a credit union built to connect with members digitally rather than through branches.

Devine said the primary objective is to create a habit of saving for new members.

“But certainly they’re getting an opportunity to learn about Alliant.”

He said the credit union has access to more free ATMs than the nation’s two largest banks, and rates that are more attractive than others.

“As a result of that, a number of them will expand their relationship with us,” he said.

So far, about 30% of the new members have expanded into a checking relationship, in addition to their savings account.

“They see the value of what we have to offer,” he said. “Certainly, it’s gotten the word out about the power of Alliant and the power of credit unions and what we can do to help members on their savings journey.

“We have a different model. We’re a digitally focused organization that really looks to help enhance the ability of financially savvy members to save,” he said. “It’s important to have emergency savings accounts now more than ever.”

For one thing, he said their digital-dependent design gives Alliant one of the lowest cost structures among credit unions.

NCUA data supported the contention. As of Dec. 31, Alliant was the nation’s ninth-largest credit union. Its operating costs were just 1.44% of average assets in 2020, compared with 2.65% for all credit unions with more than $10 billion in assets and 3.03% for all credit unions.

Its overhead ratio was lower than any other credit union in the Top 10 of assets. The next closest was State Employees’ Credit Union of Raleigh, N.C. ($47.4 billion, 2.5 million members), where operating expenses were 2.11% of average assets.

Alliant also runs with a lower-than-average margin. Its return on average assets was 0.49% for the 12 months ending Dec. 31, up 3 basis points from 2019.

Among credit unions with more than $10 billion in assets, ROA fell 43 bps to 0.68% last year. Among all credit unions, it fell 23 bps to 0.71%.

Devine said its 0.55% rate on savings is lower than a year ago, but still far higher than average.

“We are blessed at Alliant with a strong offering. Because of our digital model, we are able to offer our members far better than market rates,” he said.