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I found a 5.22apy 5 year CD....
Old 07-06-2005, 07:54 AM   #1
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I found a 5.22apy 5 year CD....

OK you lot! (I hope I do not offend anyone by referring to us all as "Us Lot" or "You Lot" when I am not included, but it is so much more verbose than "all", and injects a little humour into my normally mundane life)

I found a CU, Wingsfinancial.com that used to be Northwest Airlines FCU. They obviously decided that it is a loosing battle to be associated with an airline these days, so it changed it's name, and is no longer paying NWA to use it's name. They have this great 5 year deal. Anyone used them, is a member etc.? I did some research on the NCUA website, and they are worth gobs of cash. It appears (needs more research, I am not sure if they allow individual membership) that you can get a membership if you join Airforwarders.org first, assuming you do not work for an airline or associated industry.

SWR
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Re: I found a 5.22apy 5 year CD....
Old 07-06-2005, 11:52 AM   #2
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Re: I found a 5.22apy 5 year CD....

They aren't as big and strong as Pen Fed, but they look sound enough.
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Re: I found a 5.22apy 5 year CD....
Old 07-06-2005, 04:21 PM   #3
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Re: I found a 5.22apy 5 year CD....

Quote:
Originally Posted by brewer12345
They aren't as big and strong as Pen Fed, but they look sound enough.
How does one go about determining the strength of the credit union? I went to the ncua.gov
website and looked at the financial ratios, but comparing two CUs seems hard.

Thanks.
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Re: I found a 5.22apy 5 year CD....
Old 07-06-2005, 05:38 PM   #4
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Re: I found a 5.22apy 5 year CD....

Most "Federal" Credit Unions are insured, just like banks. Just make sure your balance doesn't get close to the insurance max.
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Re: I found a 5.22apy 5 year CD....
Old 07-06-2005, 06:18 PM   #5
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Re: I found a 5.22apy 5 year CD....

The National Credit Union Administration (NCUA) is the federal agency that governs federal credit unions and insures savings in federal and most state-chartered credit unions across the country through the National Credit Union Share Insurance Fund (NCUSIF). The insurance amount is $100,000.
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Re: I found a 5.22apy 5 year CD....
Old 07-06-2005, 06:19 PM   #6
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Re: I found a 5.22apy 5 year CD....

Anyone off the top of their head know how many (number or percentage) of CU's that go bust every year? Wondering exactly how worried one should be about limits and insurance.
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Re: I found a 5.22apy 5 year CD....
Old 07-06-2005, 06:42 PM   #7
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Re: I found a 5.22apy 5 year CD....

I don't have any statistics on credit union failure. If I recall correctly, the failure rate is pretty low, partly because of limits on the types of business they can conduct. They aren't anything like the savings and loans that ended up having over 500 close during the S&L crisis, which in part was precipitated by deregulation.

I spent a lot of time dealing with failing S&Ls and have spent a fair amount of time dealing with banks that were sold to avoid a bank failure. Outside of the S&L crisis, on all the bank near failures I have dealt with, all depositors got all their money bank, even if over the FDIC limits. Never have I had to deal with a credit union failure.
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Re: I found a 5.22apy 5 year CD....
Old 07-06-2005, 06:46 PM   #8
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Re: I found a 5.22apy 5 year CD....

Quote:
Originally Posted by Just not
Anyone off the top of their head know how many (number or percentage) of CU's that go bust every year? Wondering exactly how worried one should be about limits and insurance.
A CU "going bust" is a very rare event. I worked for a national supplier to banks and credit unions for 25 years and we had contracts with over 1,500 CU's at any one time. I can never recall a CU failing, even the very small ones (and there are some that only have one or two full-time employees).

Unlike banks who compete fiercely with each other, CUs are "not for profit" organizations and have a very strong mutual support network. They are in a battle with banks who are crying foul over the fact CU's don't pay taxes like banks do. That makes it easier for CUs to compete (pay higher rates for deposits and provide loans at lower rates) and bankers are spending big bucks lobbying congress to change the laws to tax CUs. That has caused the CU "movement" to circle the wagons to fight off the bank attack and support each other. Combine that with the NCUA insurance and you have little to worry about.

(Disclosure: I have money in CU certificates of deposit.)

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Re: I found a 5.22apy 5 year CD....
Old 07-06-2005, 06:47 PM   #9
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Re: I found a 5.22apy 5 year CD....

Thats what I thought.
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Re: I found a 5.22apy 5 year CD....
Old 07-07-2005, 06:33 AM   #10
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Re: I found a 5.22apy 5 year CD....

Bankrate.com used to have a Star Rating for CUs. They have changed there interface for CUs of late, and I cannot find it. When you did a hit for CDs, it used to have stars below the names. 3 or better was usually what I remember to be OK. If anyone finds any more let me know.

SWR
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Re: I found a 5.22apy 5 year CD....
Old 07-07-2005, 07:21 AM   #11
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Re: I found a 5.22apy 5 year CD....

Quote:
Originally Posted by WanderALot
How does one go about determining the strength of the credit union?* I went to the ncua.gov
website and looked at the financial ratios, but comparing two CUs seems hard.

Thanks.
Heheh, how much do you really want to know? I do this sort of thing for a living, so I can go into painful amounts of detail if necessary.
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Re: I found a 5.22apy 5 year CD....
Old 07-07-2005, 07:52 AM   #12
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Re: I found a 5.22apy 5 year CD....

Our local CU is offering an additional .2% with a 100k min deposit. Thats 4.6 for 5 yr. Close but no cigar. But area banks are definately way behind.


INSTITUTION APY as of 6/28
HVFCU 4.40
Hudson United Bank 2.09
Charter One 3.50
M & T 3.60
HSBC 4.00
Key Bank 3.85
Bank of NY 3.69
Wachovia 3.55
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Re: I found a 5.22apy 5 year CD....
Old 07-07-2005, 08:15 AM   #13
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Re: I found a 5.22apy 5 year CD....

My CU gives me a good premium over published rates becaus,e of my significant investments with them. But, I am nervous with the amount of debt there is out there, and, that when the preverbial "bubble" bursts, things could go "t?t? up". Currently I have more than the insured value with them in 2 separate joint accounts, and was looking to spread it around a little. Trouble is they give me the better rates than anyone I can find. (5.22% APY for 5 years, 4.22 for 1 year). They are Orange Countys Credit Union in Southern California. they are worth about $783m, not huge but up there, and they have been around for 60 years or so.

I am not sure I should worry as much as I do, some folks have gazillions with Vanguard and Fidelity etc. which are not really insured at all.

SWR
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Re: I found a 5.22apy 5 year CD....
Old 07-07-2005, 08:45 AM   #14
 
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Re: I found a 5.22apy 5 year CD....

Quote:
I am not sure I should worry as much as I do, some folks have gazillions with Vanguard and Fidelity etc. which are not really insured at all.
Remember - No Risk = No Return

Bigger Risk = Bigger Return

With CD's you will always lose money in the long run - It's guaranteed!
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Re: I found a 5.22apy 5 year CD....
Old 07-07-2005, 12:46 PM   #15
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Re: I found a 5.22apy 5 year CD....

Quote:
Originally Posted by brewer12345
Heheh, how much do you really want to know? I do this sort of thing for a living, so I can go into painful amounts of detail if necessary.
Just curious. We belong to 2 CUs and both appear to be pretty strong. We don't have $100,000 in either and I'm not really worried. How about a paragraph full on how to evaluate different CUs?!

On a unrelated note, I found out today that one of our CUs offers a 5.01 rate on a MM type account! The catch is that the account can only be funded through payroll deductions and it is only available to teachers. In addition, the account rolls over every year whenever you want it and it's NCUA insured. You also can withdraw the money anytime you want without any penalty. So it's a basically a money market that pays 5%, but only for 1 year.

Turns out that a lot of teachers who get paid 10 months out of the year have trouble saving for the 2 months when they don't get a check. The CU rep told me that this was created as sort of a forced savings plan for teachers! :
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Re: I found a 5.22apy 5 year CD....
Old 07-07-2005, 01:45 PM   #16
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Re: I found a 5.22apy 5 year CD....

Quote:
Originally Posted by WanderALot
Just curious.* We belong to 2 CUs and both appear to be pretty strong.* We don't have $100,000 in either and I'm not really worried.* How about a paragraph full on how to evaluate different CUs?!
Without getting too much into the nuances of it, the main things to look for are:

- Capitalization: equity to assets should be at least 6%. I like to see 10% or better.
- Asset Growth: Fast balance sheet growth causes a lot of strain. I like to see no more than 25% asset growth a year.
- Earnings: A credit union should be able to earn some reasonable profits. I'd like to see return on assets of 1%.
- Asset Quality: I don't want to see more than 1 or 2% of loans delinquent.
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Re: I found a 5.22apy 5 year CD....
Old 07-07-2005, 03:09 PM   #17
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Re: I found a 5.22apy 5 year CD....

Thanks for the info Brewer.
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Re: I found a 5.22apy 5 year CD....
Old 07-07-2005, 08:14 PM   #18
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Re: I found a 5.22apy 5 year CD....

Quote:
Originally Posted by ShokWaveRider
They are Orange Countys Credit Union in Southern California.
Hmmm, Orange County.

"For that to fail, the whole county would have to go bankrupt!"
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