10-4 Share Certificate

10-4 SHARE CERTIFICATE

4.00% APY with a Short, 10-month Term

DETAILS:

The 10-4 Share Certificate is a high-yield share certificate that offers a 10-month term with a 4.00% APY. Unlike our current share certificates, the new 10-4 Share Certificate features a special higher APY for a short term, with no minimum opening deposit. This enables members to earn more without tying up their funds for a long period of time.

10-4 Share Certificates offer the following features:

Term 10 months Rate 4.00% APY

Member Benefits Rate Bonus None

Step/Bump-up feature None

Minimum Opening Deposit None

Minimum Balance Requirement None

Early withdrawal penalty Standard (last 31 days of dividends)

Rollover at end of term Rolls over into regular 12-month share certificate

DATES:

10-4 Share Certificates will be offered starting Thursday, December 1, 2022 (subject to change, according to product completion).

COLLATERAL FOR MEMBERS: Coming Soon

CAMPAIGN PURPOSE:

Our goal is to provide a better return on member deposits/savings to encourage members to move their money to LAPFCU and help us stay competitive with other financial institutions that are running similar promotions. A higher APY enables us to capture deposits and lock in a dividend rate before our rates and cost of funds increase further (as evidenced by signals from the Federal Reserve). Attracting more deposits enables LAPFCU generate more net interest income by investing or lending the additional funds.

With climbing interest rates, this option gives members a chance to accrue interest at a higher rate than ordinary share certificates. High-yield share certificates can also be a viable alternative to a turbulent stock market. This product will allow us to provide greater value to our members and remain competitive in our market, while attracting new deposits.

TALKING POINTS:

High-yield 10-4 Share Certificates:

• Guaranteed returns with very low risk

• No minimum opening deposit

• Members can earn a competitive annual percentage yield (APY) without tying up their money for a long period of time

• Ideal for short-term savings goals

• Alternative to savings accounts, money market accounts, stocks, bonds, and mutual funds

• Funds are federally insured up to $250,000

FREQUENTLY ASKED QUESTIONS:

Q: How does a high-yield share certificate work?

A: A high-yield share certificate offers one of the highest interest rates available across financial institutions with minimal risk.

Accounts are federally insured by National Credit Union Administration (NCUA), which covers accounts up to $250,000 per depositor per bank.

Q: What are the benefits of a 10-4 Share Certificate?

A: 10-4 Share Certificates provide:

• Higher, fixed dividends rates

• No minimum opening deposit

• No monthly fees

• Federal Insurance protection

Q: What are the disadvantages of a 10-4 Share Certificate?

A: 10-4 Share Certificates do not allow access to money during the share certificate term; members will incur a penalty for early withdrawals.

Q: Who might be interested in a 10-4 Share Certificate?

A: A member might benefit from a 10-4 Share Certificate if they are:

• Looking to maximize earnings and minimize risk.

• Trying to earn more interest than they would with a traditional savings account, with short-term goals in mind.

• Building an emergency fund or saving for a specific purchase, such as a vacation or the down payment for a car or house.

Q: Is there a minimum deposit amount for a 10-4 Share Certificate?

A: There are no minimum or maximum deposit amounts on 10-4 Share Certificates.

Q: What happens if the interest rate changes after a member opens a 10-4 Share Certificate?

A: Share certificates are locked into the dividend rate that is approved at the time the share certificate is opened. This rate will remain in place for the 10-month term.

Q: How can members choose their monthly interest disbursement?

A: The interest earned on a 10-4 Share Certificate will automatically be added to the principal balance of the share certificate each month. Alternatively, a member can withdraw any earned interest on the share certificate penalty-free. They can also transfer the monthly interest earned to another LAPFCU account, or to one of their linked external bank accounts.

Q: What are the options when a 10-4 Share Certificate matures?

A: We will notify the member before their 10-4 Share Certificate’s maturity date. There is a 7-day grace period following the share certificate’s maturity date, during which a member has the following options:

• Withdraw the balance without penalty

• Roll over the share certificate to a regular 12-month share certificate, with the applicable rate at the time of renewal

• Close the share certificate and open a new one with a different term

NOTE: If no action is taken within the 7-day grace period, the share certificate will automatically roll over into a regular 12-month share certificate.

Q: When the 10-4 share certificate term is over and it renews to the 12-month regular share certificate, does the MB bonus rate kick in?

A: Yes.

Q: What happens if a member’s 10-4 Share Certificate automatically renews?

A: The renewal term will begin (retroactively) on the day after the maturity date of the previous share certificate term. The principal balance for the renewal term will be the total balance in the share certificate (principal plus the interest that was not previously withdrawn) on the date the share certificate account is renewed. The share certificate will automatically roll over into a regular 12-month share certificate, with the applicable rate at the time of renewal.

Q: Can members find their 10-4 Share Certificate maturity date in online or mobile banking?

A: Yes. If a member logs in to LAPFCU.org, the maturity date will be displayed on their account information page.

Q: Is there an early withdrawal penalty?

A: If a member withdraws the balance from their 10-4 Share Certificate prior to maturity, they will be charged an early withdrawal penalty, based on the 10-month share certificate term and the principal.

If a member withdraws prior to 10 months, the last 31 days of dividends plus simple interest will be withheld, plus an additional penalty.

• Daily simple interest is calculated by multiplying the interest rate (not APY) by the amount of principal in the share certificate account and dividing by 365. To calculate the early withdrawal penalty, multiply the daily simple interest by the number of penalty days.

• A member cannot withdraw a portion of their principal at any time prior to maturity.

Q: Will members receive notifications about their 10-4 Share Certificate?

A: Yes. LAPFCU will send a member a reminder 30 days before the 10-4 Share Certificate’s maturity date. Also, any time a member makes a change to the Share Certificate plan, they will receive confirmation of the change. If a member’s 10-4 Share Certificate renews, we’ll send them and any joint owners (for joint accounts) an email or letter (depending on statement preference) with the share certificate’s new term, rate, and maturity date.

Q: Is there a cap on how much a member can deposit to a 10-4 Share Certificate?

A: No. There is no maximum cap.

Q: Is there a limit on the number of 10-4 Share Certificates a member can open?

A: Yes, one per member.

DISCLOSURE:

*APY = Annual Percentage Yield. No minimum opening deposit or balance requirement for 10-4 share certificate promotion. The Member Benefits rate bonus does not apply to the 10-4 share certificate promotion. Early withdrawal penalties apply. At the end of the 10-month term, the balance in your 10-4 share certificate will roll-over into a regular 12-month share certificate. All rates and terms are subject to change without notice. Ask for complete details.

CONTACT: Any questions? Contact Omar Ramirez at oramirez@lapfcu.org or (818) 779-3275

OTHER Q4 CAMPAIGNS/MEMBER COMMUNICATIONS:

• ARMs (Adjustable-Rate Mortgages): Online and mobile banking prompts, digital ads, and email – November, December

• Home Loans and HELOC (Home Equity Line of Credit): Online and mobile banking prompts, digital ads, and email – November, December

• Guardian Checking: Online and mobile banking prompts, digital ads, and email – November, December

• Cash Packs: Online and mobile banking prompts, digital ads, and email – November, December

• Skip-a-Pay: Online and mobile banking prompts, digital ads, and email – November, December

• Consumer Loans Refi Offer: Members get $200 when they refinance a vehicle loan, personal loan, or credit card debt from another lender with LAPFCU. Plus, no payments for 90 days on auto loans only. Eligible loans must be a minimum of $10,000. – November, December

• CUSO Financial Services: Letter, emails, and prompts with information about helpful investment and retirement planning services in a volatile economy – November, December

• Board Election Notices: Online and mobile banking prompts, digital ads, and email – November, December

• Loan Engine Wave 32: Emails and letters with pre-approved vehicle loans and invitations to apply for real estate loans – November 2022 to February 2023