Daily Dupaco

Monday, July 23, 2018

How do the federal interest rate hikes impact you?

How the federal interest rate hikes impact you

The interest rate game is a fickle sport.

When rates rise, savers generally win in the form of higher interest on their savings, while borrowers face higher costs for their loans. The positions shift when interest rates dip.

In March, the Federal Reserve raised the interest rate to the highest level in a decade—the U.S. prime rate is at 5.00 percent—with more rate hikes expected this year.

Whether you’re saving or borrowing, Dupaco continues to have your best interest in mind.

“We’re really concentrating this year on giving back to our members as much as we can,” says Jill Rothenberger, vice president, consumer lending at Dupaco.

Here’s how the Fed’s rate hikes might impact you as both a saver and a borrower.

THE SAVER


Dupaco continues to offer above-market rates for its savers.

And lately, the credit union has been offering specials on its term-share certificates, or certificates of deposits. The certificates are federally insured and are a good savings opportunity if you’re looking for an investment vehicle with term options and a fixed rate.

“As the rates rise, people have felt more comfortable to move into certificates, so we want people to benefit from them,” says Meggan Heacock, vice president, controller at Dupaco.

Related: See our term-share certificate rates

Qualified members also can open High-Yield Savings accounts again. These completely liquid accounts pay higher than average rates, which have steadily increased this year, Heacock says.

Request an appointment for a free Dupaco Money Makeover today!

“It’s always good to have systematic savings built up,” Heacock says. “But you want to be mindful of how much money you have in which types of savings and investment accounts.”

Related: Put your savings goals on auto-pilot

THE BORROWER


It’s easy to get comfortable with the loan rates you’ve been paying. But some loans—including certain student loans, home equity lines of credit and credit cards—have variable rates. So as the interest rates rise, your monthly payments climb—in turn tightening your budget.

The average credit card rate is a full percentage point higher than it was a year ago and is likely to jump more this year, according to a Washington Post story.

“With the higher interest rates, we want to make sure our members can still afford to borrow and repay their debt, so we’re trying to help in any way we can,” Rothenberger says.

Here’s what Dupaco is doing to help borrowers like you:


Credit cards

If you’re carrying credit card balances, pay close attention to those rates and whether they’re impacting your monthly payments. You might be able to lower your payments by transferring your balances to a low-rate Dupaco Visa credit card. There are no fees to do so, and Dupaco is running a low-rate balance transfer promotion through August 2018. 

Home equity line of credit

Another option: Consider consolidating debt with a home equity line of credit. Dupaco is offering a couple of HELOC promotions, including a cash back option and a low introductory rate option for qualified borrowers. 

Mortgage

Dupaco also is offering a discount on its closing costs for both new and refinanced mortgages

Student loans

If you’re repaying student loans, talk to your credit union to find out whether you can save on interest by refinancing variable-rate loans into a fixed-rate student loan, Rothenberger suggests. 

“Whether you’re a depositor or borrower, it’s always good to come in and talk to someone at Dupaco to get free advice before you make any financial decision,” Rothenberger says. “We want to make sure you’re borrowing the right amount that fits your budget or investing in the areas that best fit your individual needs.”

THE MEMBER


As a member-owner of your financial cooperative, you can take advantage of additional savings opportunities.

Dupaco offers Cooperative Loan Giveback pricing. The more you support your cooperative by doing business with Dupaco, the more you can save with bonus loan rate discounts.

Dupaco also has brought back its popular Thank Use initiative this year. Active participation powers the credit union, and you share in the success. The more you use Dupaco, the more you’re thanked with extra cash dividends.

In the past two years, participating members received individual shares of more than $6 million in Thank Use!

Related: Learn how you could earn Thank Use

By Emily Kittle

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