The Reverse Tier Savings Account That Gives More To Those With Less

Canvas Credit Union’s 18-month-old account was designed with younger members in mind and has attracted millions in deposits to the Colorado cooperative.

Top-Level Takeaways

  • As the industry&’s loan-to-share ratio creeps up, credit unions are looking for ways to increase deposits.
  • Canvas Credit Union introduced a reverse tier savings account to encourage younger members to start a savings habit.

The credit union industry&’s loan-to-share ratio hit a first quarter high of 82.3% as of March 2019, continuing a half-decade-long trend of loan growth surpassing deposit growth. On the institution level, 236 credit unions at first quarter are 100% or more loaned out; that&’s compared to 214 last year and 159 the year before that.

As credit unions face liquidity constraints stemming from robust loan growth without the deposit growth to match, some institutions are re-thinking legacy products to catch the eye and wallet of potential savers. Canvas Credit Union ($2.6B, Lone Tree, CO) is no exception.

At first quarter, Canvas&’ 96.8% loan-to-share ratio ranks 10th highest among Colorado credit unions and third among the state&’s seven credit unions over $1 billion in assets. Led by a large auto loan program, more than half of them indirect loans, Canvas&’ recent loan has exceeded 20% each quarter between first quarter 2014 and third quarter 2017, though now it more closely aligns with national average.



In the past five years, Canvas&’ quarterly loan growth has often exceeded 20%. In that same time, the credit union’s loan-to-share ratio has increased more than 35 percentage points.

The Colorado market is hot, people want to move here, says Tansley Stearns, the credit union&’s chief people and strategy officer. We want to be a big part of serving those people who live here and help them lead fantastic lives.

If its loan growth is any indication, Canvas has successfully done so, providing Coloradans the auto, home, and commercial loans necessary for Centennial State transplants to hit the ground running. In the past five years, the credit union&’s loan-to-share ratio has jumped more than 35 percentage points to its current rate, spurring the credit union&’s current focus on savers.

Over the past several years, Canvas has grown deposits well as it attempts to match loan growth, but there&’s more to it than that. Stearns and the credit union are also seeing a real need to encourage savings in the communities it serves especially among younger generations.

Industrywide, certificate products are the fastest-growing segment of the deposit portfolio; at first quarter, year-over-year certificate growth reached nearly 20%, highlighting the industry&’s success drawing deposits through this product. However, though credit unions can offer higher rates and drive deposits, certificates rates are generally tiered so that a greater deposit returns greater yield. That fact makes certificates a difficult prospect for younger savers who often can&’t deposit enough to reach the top tier rate.

This is not always the case, but when people are younger, they borrow, and as people get older, they move into a phase of life where they are more likely to put money away, Stearns says. That&’s why in November 2017 Canvas turned the idea of a certificate product for younger borrowers on its head: introducing its Reverse Tier Savings Account, which pays up to 3.25% on the first $2,000 deposited with no minimum term.

The Reverse Tier Savings Account

As the official credit union of Colorado State University, Canvas holds focus groups on campus to learn more about its student population. As it often does, while considering the needs of its younger population Canvas met with a group of college students to get a sense for what was important to them in a financial institution, but also to speak more broadly about products and services.

Before we went up there, I would have guessed our big topic of discussion to be student lending, Stearns says. But we heard most about the need to save.

These students professed they didn&’t know how to save, or that they needed help doing so. The credit union knew it could serve this population by creating a new product, but what did the credit union&’s deposit committee which creates new products and manages current ones need to consider?


Tier APY
$2,000 3.25%
$3,000 1.50%
$1,165 0.75%

An account balance of $6,165 the average account balance, according to Canvas nets savers a blended APY of 1.93%. Interest is paid at tier rates on balances within each tier.

For one, a high rate. In fact, the account&’s 3.25% is higher even than Canvas&’ best certificate rate. For another, access to funds the account has no minimum term. Those considerations paired with a high level of service led Canvas to its Reverse Tier product, something with which the credit union has seen success.

We&’re thinking about savings for all generations, Stearns says. But we think this is a really good fit for the younger demographic that&’s looking to start a savings habit.

For those with more than $2,000, interest is paid at tier rates on the balances within each tier. For the average account holder, who has a $6,165 balance, according to the credit union, this nets a blended APY of 1.93% and yearly interest of nearly $120. It&’s been well received by membership. Through May 2019, the credit union counts $166 million in account balances.

We&’ve seen a wide range of members take advantage of the product, too, Stearns says. It hasn&’t just been folks at the beginning of their savings journey.

For Stearns, the reverse tier account&’s success reflects the value of product development. The decision to create this product was not made in a silo, nor was its rollout. Each step along the way different departments and teams worked together to lift this product off the group and out to members, though no step was more important than its first one.

It didn&’t start with what we, the credit union wanted, Stearns says. It all started with listening to our members&’ needs.


July 8, 2019

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