For banks and credit unions, few moments are as pivotal or as stressful as when a large deposit relationship comes up for repricing. Whether it’s a municipality, government agency, or another institutional depositor, these high-value accounts play an essential role in maintaining balance sheet strength. But when the term ends and it’s time for a new bid, the risk of losing those deposits and the revenue they generate becomes very real.
Often, financial institutions are forced to decide whether to offer a higher rate to retain the relationship or accept the potential outflow and scramble to replace the lost funding. Neither is ideal. Fortunately, there’s a more strategic option available that not only supports deposit retention but also positions the institution for scalable, cost-effective growth.
Rising Rates, Increasing Pressure
In many cases, municipalities or government bodies deposit funds in a bank or credit union primarily to earn interest. These are not transactional accounts; they’re performance driven. When the original term expires, these organizations expect to maintain or exceed their current interest earnings.
From the institution’s perspective, this creates immediate pressure. Competing banks are likely circling, offering aggressive bids to lure the relationship away. And even if the institution wins the business again, it often comes at the cost of tighter spreads and reduced flexibility.
This is the moment when forward-thinking institutions call Plinqit.
A Smarter Play: High Yield Savings by Plinqit
To address this specific business need, Plinqit created High Yield Savings, a turnkey deposit solution that helps banks and credit unions prepare for repricing events.
High Yield Savings by Plinqit delivers three critical advantages.
- Attractive Returns. Institutions offering High Yield Savings accounts through Plinqit see an average account balance of more than $45,000. These accounts attract serious savers – not rate shoppers – who are looking for stability and yield.
- Scalable Growth. When a large deposit relationship is at risk, institutions don’t have time to build new deposit pipelines from scratch. High Yield Savings is easy to implement and designed to scale quickly. It gives institutions the ability to rapidly replace lost deposits or grow new ones before a repricing event ever hits.
- Flexible Rate Management. Perhaps most important in today’s interest rate environment, High Yield Savings lets institutions align rates with the Federal Reserve instead of being locked into a fixed cost structure. That flexibility gives banks more control over margin management and allows for strategic rate adjustments based on market conditions.
Staying Competitive in the Bid Process
Municipalities and government entities are often required to solicit bids when their deposits come due. The competition is fierce, and the selection criteria are largely interest-rate driven.
By proactively growing deposits through Plinqit’s High Yield Savings, banks and credit unions are in a stronger position to weather the potential loss of any one large account. This approach provides a broader and more stable deposit base, giving institutions more breathing room to participate in bids strategically rather than reactively.
Moreover, having a product like High Yield Savings demonstrates to municipalities that your institution has innovative, competitive offerings. That can support retention not only through rate but through brand strength and product innovation.
Why Waiting Is the Wrong Move
Many institutions don’t act until they’re in the middle of the bid. Or worse, after the deposit walks out the door. But by then, it’s often too late to replace the funding or win it back.
Instead, banks and credit unions that engage early – ideally months before the repricing date – are in a much better position to shape outcomes. By activating High Yield Savings by Plinqit well ahead of time, they can…
- Build a cushion of new deposits to offset potential outflows.
- Offer a compelling product to the same customer segments they risk losing.
- Rebalance their funding mix to better align with internal cost of funds and risk appetite.
A Proactive, Practical Strategy
High-value deposit relationships can be both an asset and a liability. When they’re stable, they support balance sheet growth. But when they’re at risk, they can force costly decisions.
Plinqit’s High Yield Savings solution gives banks and credit unions a way to change that equation. Instead of waiting to respond, institutions can lead with a proactive strategy that attracts new deposits, retains critical relationships, and improves rate management flexibility.
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