As tax season rolls around and consumer spending takes a dip, credit unions often find themselves sitting on a surplus of liquidity. While this may feel reassuring, too much idle cash can create challenges: inflation, lower returns, and missed investment opportunities. 

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This is an ideal moment for CEOs to harness excess liquidity as a strategic asset, aligning it with both short- and long-term goals. The right approach can transform idle cash into a catalyst for growth and success.

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The key? Balance. A savvy credit union CEO knows how to weigh growth opportunities with prudent financial management. By carefully evaluating the economic environment, member needs, and your institution’s long-term strategy, you can make strategic decisions that will ensure your credit union thrives.

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Take Action! Tap into Acumen’s tailored solutions to optimize your liquidity strategy and unlock fresh growth opportunities that enhance member retention, maximize investment yields, and drive community impact.

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Reinvest in Member-Centric Services

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Excess cash can be used to create new, tailored financial products and services that better serve members’ evolving needs. For example, introducing low-rate loans, better savings account options, or special programs for underserved groups can differentiate the credit union in the market. We recommend institutionally priced annuities to offer secure, long-term income with guaranteed payouts.

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Institutionally priced annuities are a type of annuity contract that is typically available to institutional investors, such as pension funds, endowments, and large corporations. 

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Some key benefits: 

• Competitive Pricing: Institutionally priced annuities often offer lower fees and expenses compared to retail annuities, thanks to the bulk purchasing power of institutional investors. 
• Compelling Yield Potential: Institutionally priced annuities are designed to deliver attractive, risk-adjusted returns. With targeted IRRs of 6–8% and built-in principal protection, these vehicles offer a disciplined approach to generating consistent performance while protecting capital—ideal for balancing growth and security in today’s market environment.

• Risk Management: Institutionally priced annuities can offer various risk management features, such as downside protection strategies, to help safeguard against market volatility and longevity risk. 
• Diversification: By incorporating institutionally priced annuities into portfolios, investors can diversify their asset allocation and transfer the risk of loss to the insurance companies.

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By providing opportunities for long-term growth, and limiting the effect of sequence of returns risk, annuities allow investors to benefit from market appreciation and compounding returns over time, without the risk of loss.  

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Acumen’s tailored approach is to work  with your credit union to design and right-size solutions that meet your unique needs. “They understand us by customizing our program to our risk tolerance, performance and benefit objectives,” said Rick Weber, President & CEO, Ocean Air CBC FCU.  “Acumen is among the best in the industry and they are top notch in support of regulatory, training, and accounting while balancing the needs for our credit union.” 

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Enhance Community Engagement Charitable Impact

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Credit unions are uniquely positioned to drive meaningful change in their communities while maintaining financial strength. Unlike traditional financial institutions, credit unions operate with a mission-driven philosophy, making community support a natural part of their DNA.
CEOs can strategically use excess funds to strengthen the credit union’s ties with the community. Acumen is the industry leader in leveraging Charitable Donation Accounts (CDAs) and Community Impact Funds to maximize impact for credit unions. 

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A Charitable Donation Account is a specialized investment tool designed to increase your CU’s capacity for giving without straining operational budgets. ‍Here’s how it works:

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• Your credit union invests a portion of its assets in a CDA.
• At least 51% of the returns must be directed toward charitable contributions.
• The remaining earnings can be retained by the credit union, creating a self-sustaining giving model.

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By using CDAs, credit unions can fund scholarships, financial literacy programs, local charities, and community development projects—all while benefiting from investment growth. Acumen’s Charitable Donation Accounts provide clients with a transformative opportunity to amplify their charitable reach while generating meaningful financial returns. Our industry-leading expertise ensures each strategy is customized to maximize both impact and value. 

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Community Impact Funds are investment portfolios designed to generate both financial returns and positive community outcomes. These funds can support:

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• Sustainable development initiatives
• Affordable housing projects
• Educational programs and workforce development
• Local business growth and economic mobility

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By integrating impact funds into their investment strategy, credit unions can extend their influence beyond traditional charitable giving and create lasting, systemic change in their communities. When CEOs focus on socially responsible investments, they can further solidify their credit union’s position as a trusted institution that aligns with members’ values. Members are more likely to remain with—and advocate for—an institution that visibly contributes to the well-being of their community.

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Best Practices For Smart Liquidity Allocation

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By making strategic, member-centric decisions about how to allocate excess cash, credit union CEOs can turn financial resources into a powerful tool for growth, differentiation, and long-term success. In doing so, they will exemplify the true spirit of credit unions—where financial success goes hand in hand with making a positive difference in their community.

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Diversify: Allocate liquidity across multiple investment types. Introducing new types of loans, such as green or sustainable loans, or offering flexible terms for small businesses can create a competitive advantage.

Maintain Risk Balance: Keep a portion in safe assets while optimizing returns.

Regular Review: Assess liquidity needs and market conditions frequently.

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Acumen is not just a provider; we are a financial performance partner, dedicated to achieving unparalleled impact and success. Our tailored strategies reduce costs, enhance services, and provide a seamless experience for credit unions and their employees. Reach out today to discuss how you can leverage excess liquidity for the future of your credit union!