Credit Union rapacity

[JoeWras]

All CUs are not created alike. I was recently a member of 3 different CUs at once. All were completely different. I had to fire one of them because they simply would not offer any rates on savings or CDs close to market.

The second CU was acting much like a bank. Their gimmick savings account which required 30 debit card transactions per month really ticked me off. I took out a couple hundred thou and put it in Ally and let both the CEO and a few board members know. They recently changed some of their savings rates based on this feedback from me and many other members. Working with board members on a CU actually means something and usually has an impact.

The third CU is all about members and is where most of our cash is (aside from Ally bank). No gimmicks, just member service and fair rates. The way it should be.

 

[mamadogmamacat]

My CU home page advertises a 2% "High" yield checking, which is what I have had for several years. Of course, the rate has been as low as 0.5% back before the economy got stronger. The 2% has been the rate for about the last 3 or 4 months. And it applies as it has since inception, to the first 20K of your balance, drops to 0.5% for any balance over 20 thousand. hoops are minimal and were things i was doing anyway, such as DD of pension. So, it works well for me.

 

[John Galt III]

I have been a member of a big credit union for decades. It has gone downhill. 5 year cd pays 1.83%. interest on checking is 0 percent. interest on savings is 0.05 percent. $2 per month paper statement fee. A new fee ($5 maybe per month) if checking balance ever falls below $1,500 during the month. Stupid point system to earn 'perks'. 100 checks cost $16.00 (free if you jump through enough annoying hoops to get points). Doesn't matter how much money you have with them. In the beginning their cd interest rates were higher than average, and no fees for anything except bounced checks and a couple other things.

 

[Chuckanut]

Of course I was quite intrigued, so I called the CU. Turns out the high interest rate applies only to the first $500 on deposit in the account. The rest of the money on deposit would earn 0.2%.

One CU that I belong to does that also. I really feel that that come-on is an insult to my intelligence as well as a sign that they don't really care much about savers. Over the past few years I have drawn down what little money is left in the CU to just the bare minimum. I would not be surprised if they booted me out soon as an unprofitable member.

 

[Gotadimple]

Credit Unions can't offer high rates on savings or CDs if they also don't have a sizeable loan portfolio. The loan income is used to pay saver's rates. They have no other way to pay savers, any excess cash is invested in Treasury bills, and those are low rates as well.


CU's that have high saver rates also have high loan portfolios, and as long as they are experienced in handling the loans and dealing with loan write-offs they can pay the higher rates. If their finances don't show a strong loan portfolio, the NCUA will ding them on an audit.


So it's not about willingness to compete with the commercial banks - but willingness to accept liability for loan losses on their portfolio.


- Rita