Jan 23, 2008

What do you think about Credit Unions?

When I was Googling CD rates in hopes of finding high-interest CDs to balance my rapidly-losing-money stock and mutual funds, I came upon a list of various banks and places with their rates. Most of them were around 3 to 4 percent for any reasonable amount to invest in a CD (sorry, if I had $50,000, I would not put it all into one 10 year CD, even if the interest rate was fixed at 5 percent). Then I saw that this one place was offering a 7 percent rate for new members. 7 percent interest on a CD? Where do I sign up?

After doing a little more research, I found out that the "bank" was actually a credit union. While I had planned to take out my $5000 from my liquid BoA CD that's getting 4.1 percent interest at the moment and put it into a 7 percent CD, it turns out the only amount I can put into this CD is $1000. No more, no less. Well, getting 7 percent returns on $1000 won't hurt.

Still, I'm a bit confused about credit unions. I did some further research and they seem like a pretty good deal. The only thing I'm concerned about is that when I signed up, the fine print noted they could charge me $20 in membership fees if they wanted. It wasn't really clear if this was a one time fee, or a per year fee... or monthly...

Credit unions sound good otherwise. When it comes to obtaining loans and such, since these places are, unlike banks, non profits, they can give relatively low rates. That's about the extend of my understanding of these credit union places for the time being. I decided to sign up for that $1000 CD (I'll be dropping a check off at my local branch later this week) so I can learn more. I figure if I ever get around to be able to afford a house (or a teeny tiny condo), it will make sense to be affiliated with this type of financial institution.

Do any of you belong to credit unions? Why or why not?



4 comments:

SJean said...

I am not, but I have been in the past. I moved away from the city it was based in.

All in all, everyone has only good things to say about credit unions, since they are non-profit and member owned. I would try to find out about the fee though.

Megan said...

I had a credit union all through college - left because there wasn't one in my area and I decided to go with a national bank since I would be moving around so much.

That said, I had no trouble whatsoever with the credit union and am considering seeking one out here.

Young said...

I don't belong to a credit union, but I keep hearing great things about them. I suppose it wouldn't hurt to stop by and get more info in person. I am interested in how it goes if you decide to pursue the option.

SavingDiva said...

I belong to a credit union through work, so I don't have any sort of fees associated with my membership. I joined to get a discount on my insurance (auto and renters). I really like the services that my credit union offers, but I don't that much about other credit unions.

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