I wanted to have my money earn more interest than what it does in a money market account. So I joined Alliant Credit Union.
Alliant Credit Union is the 7th largest U.S. credit union based on asset size, with more than 250,000 members. It was originally United Airlines Employees’ Credit Union. Now anybody can join if they live or work near some northwest suburbs of Chicago or become a member of a PTA for a one-time fee as low as $3.
Credit unions are not for profit. They benefit the members in the form of higher interest rates on deposits and lower interest rates on loans. They don’t buy full-page ads in Wall Street Journal. They don’t sponsor NPR podcasts. They don’t pay bloggers referral money for new customers. That’s why you don’t hear as much about them.
I’m attracted to Alliant Credit Union because its accounts offer what I’m looking for. I considered a rewards checking account but I don’t want to bother tracking how many times I’ve used a debit card in a month. Alliant Credit Union’s accounts are hassle-free. Their checking account pays 1.75% if you opt-out of paper statement and have one electronic deposit (ACH or ATM) a month. Their savings account pays 2%. There’s no tier or cap on the amount that can earn at these rates. Nor is there a debit card usage requirement. I like them for their simplicity. They also offer a few freebies: free incoming wires, free credit score (updated quarterly), and free remote deposit capture.
Compare Alliant Credit Union with popular online bank ING DIRECT and a popular credit union Pentagon Federal Credit Union:
|ING Direct||Pentagon Federal Credit Union||Alliant Credit Union|
|Checking||< $50k: 0.25%
$50k – $100k : 1.50%
above $100k: 1.55%
|Savings||1.30%||first $10k: 0.35%
next $40k: 0.55%
next $50k: 0.65%
over $100k: 0.79%
|Surcharge-free ATM network||Allpoint||?||Allpoint
Near where I live, Allpoint ATMs are mostly in gas stations, grocery stores, drug stores, and Target stores. CO-OP ATMs are mostly in 7-Eleven stores, other credit unions, and on corporate campuses. MoneyPass ATMs are mostly in U.S. Bank branches. That’s very good coverage for me.
Alliant Credit Union uses Andera for online account opening. After I enter the personal information, there’s an identity verification step through answering questions obtained from the credit reports. It asked me about a car loan I didn’t have. I answered “none of the above” and I passed. Alliant gave me $5 seed money for the savings account. I was able to fund another $995 by a credit card.
Trying to activate online banking turned out to be more trouble than I expected. In order to register for online banking, I needed my account number, which I received by mail two business days after I opened my account online. Then it asked for the debit card number. I had to wait another three business days. Then it asked for the debit card PIN. I had to wait three more business days.
Here I was, almost two weeks after I opened the account, finally with everything I needed, I entered everything online banking registration asked for. I created a password, agreed to the online banking terms and conditions, and picked answers to four security questions, before I got this lovely message:
So I called the 24-hour customer service center. The rep first said it was because I hadn’t activated my debit card yet. After she helped me activate the debit card, she gave me a temporary password. But there was no place to put in that temporary password. After a few more tries, my account is locked. Even the customer service rep couldn’t unlock it. She said she would have to escalate it and someone else would call me back the next day.
A rep did call me the next day and I was able to enroll with a temporary access code she gave me.
Aside from not having a smooth experience as a new member, what else do I NOT get from Alliant Credit Union? Small things.
- The first box of checks is free but I don’t have a choice in the design.
- The debit card still has the old Visa logo although Visa introduced the new logo almost three years ago.
- There’s no direct download from Microsoft Money or Quicken. I will have to use the web interface to download.
- I couldn’t provide free-text answers to the security questions. The answers had to be selected from a finite set in a dropdown.
- There’s no way to create a login name for online banking. I must use my savings account number as the login.
- Alliant-initiated ACH transfers are limited to $10,000 per day ($1,000/day during the first 30 days).
All these small things require investment. A state-of-the-art online banking system costs a lot of money. Banks I used in the past made the necessary investment. ING DIRECT is well known for its website’s ease of use. I don’t think Alliant Credit Union invested as much. They bought the online banking system from another credit union in California called Wescom. If you look at Wescom Credit Union’s eBranch and Alliant Credit Union’s SkyBranch, they are practically the same:
Would I like to have a better online banking system? Yes. Am I willing to pay for it with getting a lower yield on my money? No. That’s why I joined a credit union. I’m willing to tolerate the inconvenience. It’s a tradeoff. I get what I pay for and I’m happy.
I’m giving Alliant Credit Union the TFB Award 2009 for Best Hassle-Free Checking, Savings and CDs. Good rates and good ATM coverage are the main reasons for this win.
Alliant Credit Union does not pay me in any way if you join.
Refinance Your Mortgage
Mortgage rates hit new lows. I saw rates as low as 3.25% for 30-year fixed, 2.625% for 15-year fixed, with no points and low closing cost. Check mortgage rates in your state.