bank rates

When It Comes To Your Bank’s CD Rates, Don’t Assume The Grass Is Always Greener

Not all credit unions will beat big bank deposit CD ratesCredit unions are wearing the white hats right now for one big reason: They’re not those big, bad banks.

That doesn’t mean a saver will automatically benefit by pulling money from, say, Bank of America, and placing it in the vault of a credit union down the street.

You might find more prompt customer service and fewer fees. And yes, many credit unions offer top savings and CD rates.

But not every credit union is going to offer you what you need. Some might even offer worse deals than the big banks.

Take Wescom Credit Union, for example.

Credit Union Times this week wrote about this Pasadena, Calif.-based credit union’s gimmick of handing out stickers that read “I transferred my money to Wescom” to customers who mention they’ve moved their money as part of the Bank Transfer Day movement.

That sticker is about the best thing this CU with 29 branches and 300,000 members is giving out.

That’s because its CD rates are even more pathetic than the big banks.

Wescom (www.wescom.org) compares its CD rates on its website to Bank of America, Wells Fargo and Union Bank. On 3- and 12-month CDs, it pays well below these big banks — which aren’t exactly setting records (good ones, anyway) when it comes to certificates of deposit.

In fact, Wescom pays just 0.05% APY on its 3-month CD, which is a full tenth of a percentage point below the embarrassingly pathetic national average of 0.15% APY.

Though it hardly seems possible, the 12-month term listed on its website — 0.10% APY — is actually worse. In some states, Bank of America pays almost half a percentage point better at 0.55% APY.

Now, Wescom may not be the norm when it comes to credit union deposit rates. But it’s an example of an institution that’s trying to profit from savers’ anger over bank fees without making a compelling argument to switch.

And we’re not saying gimmicks or tying to profit from a movement are necessarily a bad thing. Just have something to back up your words.

For example, Credit Union Times this week also wrote about Long Island’s three largest credit unions partnering on a website — BetterBankingForLongIsland.com — to promote Bank Transfer Day. Thing is, all three of these institutions offer pretty good CD rates.

If you’re looking for a credit union where you can put your money, the website www.culookup.com can help you find one near you. Just make sure it’s offering deposit rates you can stomach before you switch.

You’ll also find good local and nationally available CD rates offered by credit unions here at Bankaholic.

Here are some of the better nationally available offers we’ve found:

Alliant Credit Union (www.alliantcreditunion.org) pays 1.90% on 36-month CDs, 1.70% APY on 24-month CDs and 1.30% APY on 12-month CDs with a minimum deposit of $25,000. Unless you live in the Chicago area or belong to a qualifying organization, you must make a donation of at least $10 to Foster Care to Success to be eligible to join the credit union and purchase these CDs.

Firstmark Credit Union (www.firstmarkcu.org) pays 2.55% APY on 60-month CDs and 1.80% APY on 36-month CDs with a $500 minimum deposit. If you’re not a resident of Bexar County, Texas, you can join Friends of the Parks, which supports the San Antonio Parks Foundation, to be eligible to join the credit union.

Melrose Credit Union (www.melrosecu.org) pays 2.68% APY on 60-month CDs, 1.91% APY on 36-month CDs and 1.41% APY on 24-month CDs with a $5,000 minimum deposit. This New York credit union is open to anyone who pays a $1 membership fee and deposits $25 in a savings account.

Compare these offers with the best CD rates in our extensive database.

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Comments (2)
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2 Existing Comments
  1. Sarah Snell Cooke said:
    on October 26th at 07:10 am

    Credit unions make loans too. You only discuss CD rates, which does not at all provide a complete picture.

  2. Kathy at Bankaholic said:
    on November 21st at 09:16 am

    The rates quoted here for Alliant, Firstmark and Melrose are no longer available. All are paying less today.