Why have we introduced a savings cap?

In the first 5 months of 2020, members savings have increased by €7.8M in People First Credit Union. And while this is evidence of the loyalty and faith you have in your Credit Union; this level of savings growth is unsustainable.

Members might be surprised to learn that high levels of savings can actually be very challenging for Credit Unions as regulatory rules require us to allocate and hold an additional 10% of the value of all members’ savings in our ‘Regulatory Reserve’ account. Put simply, for every €100,000 our members have saved with us, we must allocate €10,000 from our surplus to this reserve account.

Credit Union surpluses are typically used for paying out dividends and investing in new services for members. However, as a result of increasing our reserves, our surplus reduces and this in turn impacts on our ability to grow and offer new services to our members.

The only way to address this issue, unfortunately, is to limit the amount of money members can have in savings with the Credit Union. This approach is in line with the majority of other Credit Unions.

From the 8th September 2020 we are setting a monthly lodgement cap for all members at €5,000 in any calendar month and we will be implementing a cap on all savings held in a members account of €30,000. These changes will affect all monies being lodged into People First Credit Union from 8th September 2020, until further notice.