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Monthly survey: Credit unions beat banks for best rates

Are you shopping for a new car? How about a better rate on a credit card or a CD? You can find the best rates by heading for a credit union, according to the latest credit union, bank and thrift comparison survey conducted by Bankrate.com.
The charts below are drawn from national averages compiled by Bankrate.com's researchers, who surveyed the top 50 credit unions, banks and thrifts in the top U.S. markets. The survey compares average rates on five standard financial products: new car loans, one-year CDs, money market accounts, credit cards and 30-year, fixed-rate mortgages.

New-car loan rates dropped across the board this month, and, once again, credit unions are offering the best deals based on a $16,000, 48-month loan with 10 percent down. The credit union average of 8.41 percent will cost $218.40 less over the life of the loan than the average bank rate of 9.01 percent. Thrifts are placing a very close second to credit unions. The 8.54 percent average rate thrifts are charging will cost only $47.52 more than the credit union rate over the 48-month term.

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If you're adding a one-year CD to your portfolio, the average credit union yield in this month's survey is 4.30 percent. Not bad when the national average is 3.64 percent. Thrifts are also beating the national average with a 3.94 percent yield, but banks are lagging with a paltry 3.33 percent. As you might expect with the Fed busy cutting rates, CD yields at credit unions, thrifts and banks are down again this month.

In the "something's better than nothing" category, the yields on money market accounts have dropped this month, but credit unions continue offering the highest average yield. This month's survey has credit unions offering an average 2.74 percent vs. a miniscule 1.45 percent average at banks. Thrifts are willing to fork over an average 2.04 percent for your money market account.

If you're shopping for a credit card, stop by the credit union. Their average 12.97 percent rate is almost 2 percent less than the average 14.88 percent a bank will charge, and it's more than 2.5 percent less than the 15.60 percent average thrifts are demanding.

This category is the exception to the "credit unions offer better rates" rule. Thrifts take first place again this month when it comes to the 30-year fixed rate mortgage. Rates have dropped a couple basis points across the board, but thrifts are on average offering 7.07 percent compared to 7.16 percent for credit unions and 7.17 percent for banks. The loan is for $125,000 with 20 percent down.

Over the life of the mortgage, the thrift rate will save you $3,038.40 over the bank rate. You'll keep an extra $2,732.40 in your checkbook if you take out a mortgage with a thrift instead of a credit union.

Bankrate researchers Delia Cardona, Eva Garcia, Janie Maldonado, Karen Quintana and Brooks Kelly contributed to this report.

-- Posted: July 24, 2001

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Search for credit union car loans
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