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Monthly survey: Credit unions beat banks for best rates

If you're looking to borrow or want to start saving, make sure you check the rates offered by your credit union. Often, you can find the best rates on loans, credit cards and savings products by heading for a credit union, according to the latest Bankrate.com survey comparing credit unions, banks and thrifts.

Each month, Bankrate.com compares the national average rates on five standard financial products: new-car loans, one-year CDs, money market accounts, credit cards and 30-year, fixed-rate mortgages. This month, on four of five (mortgages are the exception), credit unions come out ahead for the consumer.

These averages come from Bankrate's monthly survey of the top 50 credit unions, banks and thrifts in the top U.S. markets.

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48 month new-car loansBanks, thrifts and credit unions all lowered their rates on car loans a bit this month, with credit unions offering the best deal -- an average rate of 8.23 percent. That's on a $16,000, 48-month loan with 10 percent down. You'll save $228.48 over the life of the loan by getting the loan at a credit union instead of a bank. And the credit union loan will save you $195.84 over the same loan from a thrift.

One-year CDLike all deposit products, CD rates have taken a hit, again, this month. Still, the 3.98 percent average yield on a one-year CD at a credit union will beat the yield at a bank by better than 1 percent. Thrifts are more generous with their one-year CD yields than banks are, but the credit union average is still a better deal -- a full half-percent higher.

Money Market accountsInterest rates on money market accounts are also down this month across the board. But the credit union average of 2.50 percent is a hefty 1.15 percent better than the average for banks, and it's more than a half-percent better than what thrifts are offering.

Variable-rate credit cardsFinancial institutions don't want to pay you very much for your money market or CD account, but they're also charging you less interest this month on your credit card debt. Credit unions are averaging 12.61 percent for a variable-rate credit card. Banks are charging 13.91 percent and, as is usually the case with credit cards, thrifts have the highest rate -- 14.50 percent.

fixed-rate mortgagesThis is the one category thrifts generally win. Thrifts, banks and credit unions all dropped their rates 16 to 19 basis points this month (a basis point is one-hundredth of a percent). Bankrate calculates its loan comparisons on a $125,000 loan with 20 percent down. Under those conditions, a 30-year fixed mortgage will average 6.91 percent at a thrift. That means you'll save $3,016.80 over the life of the loan if you get your mortgage at a thrift vs. a bank. A thrift will save you $1,807.20 over a credit union.

Bankrate researchers Amira Ali, Delia Cardona, Eva Garcia, Brooks Kelly, Janie Maldonado and Tammy Richmond contributed to this report.

-- Posted: Sept. 24, 2001

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