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Is a credit union the way to
go?
Dear Dollar Diva,
I am looking for a place to open a savings account and a checking
account. I am considering setting up a direct deposit with a credit
union. Is that a wise thing to do, or should I stick with the banks?
-- Brandy
In general, credit unions provide
the same kinds of services that banks do: You can open a checking
account, buy a certificate of deposit and get a loan. Some will
even sell you stocks and offer you a safe-deposit box.
For the most part, so long as it
is NCUA
insured (the initials stand for National Credit Union Administration
who administer the National Credit Union Share Insurance Fund which
guarantees that up to $100,000 of your money will be replaced if
the financial institution becomes insolvent), a credit union is
a good place to take your business. For-profit banks are in the
business of making money for their shareholders. Credit unions,
however, are nonprofit institutions that are supposed to be focused
primarily on service and savings for their members.
One big perk with taking your business
to a credit union instead of a bank is that you can expect to receive
a higher interest rate on your savings account, while paying a lower
rate on your credit cards and other loans.
But don't get completely wrapped
up with statistics. The averages Bankrate found were gleaned from
a survey of the top 50 credit unions, banks and thrifts in the top
U.S. markets. Your particular credit union may not match these averages,
or you may need other services, such as ATM transactions, that a
credit union may charge more for than a bank.
When it comes down to picking a
financial institution nothing beats a little first-person research.
Visit or call the banks and credit unions you are interested in
doing business with, and have them quote rates on the products you
need. Also, be sure to compare the service you receive, as well
as the rates they're offering. You don't want to put your money
in a place that's going to give you grief every time you want to
get at it.
 DOROTHY
ROSEN has a master's degree in finance, with a specialization in
accounting, from the Kellogg Graduate School at Northwestern University
in Evanston, Ill. Rosen has more than 15 years of experience in
the financial arena, serving in Illinois and Florida as a certified
public accountant, financial consultant, expert witness and educator.
She is owner of Dorothy Rosen, CPA, a public accounting firm that
serves individuals and small businesses.
-- Posted: Dec. 6, 2000 |
