Why a Credit Union Isn’t For Everyone
I joined Alliant Credit Union back in December. So far, I primarily used the savings account. Because all my bill payments are on autopilot, I didn’t want to go through all the trouble of making changes to the checking account. But I’ve come to like Alliant Credit Union more and more. I decided use its checking account for some bills.
The biggest difference is that Alliant pays 1.5% interest on the checking account balance versus others paying near zero. There are no minimum balance, no interest rate tiers or cap, and no debit card usage requirement. To get the 1.5% rate, you only have to get paperless statements and have one electronic deposit a month (ATM, direct deposit, or transfer from another account).
As I mentioned in the previous post, anyone can join Alliant Credit Union by joining a PTA or by donating $10 to Orphan Foundation of America. Alliant doesn’t pay me in any way if you join.
Alliant Credit Union: Bumpy Ride to High Yield
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.
If Credit Unions Are Better, Why Don’t More People Use Them?
You’ve probably read it somewhere — credit unions are better than banks. That’s what Consumer Reports, Bankrate.com, and Money magazine say. Credit unions are owned by members. They are not for profit. They pay higher interest rates on checking accounts, savings accounts and CDs. They charge lower interest rates on credit cards, car loans and home loans. They also charge lower fees for overdrafts and late payments. They have more friendly customer service. Credit Unions have NCUA insurance just like FDIC insurance for bank deposits. What’s not to like them? It begs for a question:
If credit unions are better than banks, why don’t more people use them?
Subscribe
-
The End of Wall Street by Roger Lowenstein
