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Best Bank Account Interest Rates - Summary for September 5, 2017Switching from a giant monster mega-bank to a credit union is easier than you think
POSTED BY Ken Tumin
This Reuters blog post by Felix Salmon reviews a question received from one of his readers regarding the big banks and what consumers can do to level the playing field. Here's an excerpt of that question:
If customers were to take their deposits from the large banking institutions and place them in cooperative banks and small regional banks, this would have the same affect of leveling the playing field. What are your thoughts on this matter? Big banks offer pitiful interest on money that they lend and they charge exorbitant fees which contribute significantly to their profit, so it does not even make sense to do business with them (although I understand the advantages - more ATM's, theoretically more services, etc.)
Felix is pessimistic about the impact consumers can have, but he does recommend credit unions. However, he describes two issues with credit unions that make it difficult for consumers: 1) few credit union choices, and 2) too inaccessible and inconvenient.
Qualifying for Membership at Your Local Credit Union
I think the situation is better than what he describes. From my experience most people in the US can qualify to join several credit unions in their cities. In the past, most credit unions restricted membership based on employers. However, this has changed. Many credit unions now have community field of memberships in which you can be eligible if you live, work, worship or attend school in certain counties or parts of the counties. CUNA's database of credit unions makes it easy to find credit unions near where you live. This page also has a locator tool that takes into consideration not only your location, cut also your employer and other affiliations.
Qualifying for Membership at Nationwide Credit Unions
In addition to local credit unions, there are many credit unions that you can join without even residing close to any of their branches. Often you can qualify by joining an association which is open to all. Once you are a member of that association, you can join the credit union. The associations often have small yearly membership fees, but once you're a credit union member, you typically don't have to maintain the association membership to keep your credit union membership. This might seem a little unfair to the banks since credit unions receive tax breaks, but I'm more worried about the powers of the giant banks than this issue with the credit unions.
I list several of these "nationwide credit unions" in my weekly summaries. Many have a long history of offering very competitive rates.
Convenience and Accessibility
The other issue that concerns people about credit unions is the lack of convenience and accessibility. The mega-banks will often have branches on every block of your city. It's true that credit unions don't usually have that many branches. However, credit unions have developed a way to compete on this issue. Many are part of a CO-OP Network and a Shared Branching network. The CO-OP Network gives you access to many more ATMs and the Shared Branching network allows you to conduct basic banking transactions at any credit union in the network. The CO-OP Financial Services is an example of a surcharge-free ATM network and the CU Service Centers Network is an example of a Shared Branching network.
So we can do a lot today to reduce the powers of the giant monster mega-banks. It probably won't solve the too-big-to-fail issue, but it can help, and it can also help us save more money.
I've gone back to my CU too.
I have been banking all the time with one good big credit union as my primary banker and plenty of other Credit Unions as and when there is a promotion offer with them.
So, I dont like the Mega Monsters to eat my pennies..
Oh!! BTW, I never had an issue of accessability as I use their wide shared ATMs and their co-op network branches.
Unless I'm mistaken, BoA's website did had a note about that said:
"^Exclusions to Monthly Maintenance Fee changes do not apply to customers who opened a free MyAccess Checking account during specific time periods at Bankofamerica.com: Customers in Customers in GA and TX after 11/1/2006; and customers in any state after 4/20/2007. "
So it looks like those who opened the MyAccess online will not have any fees.
I've had an account with Wells Fargo since I was 14. That is where my parents banked. Primarily for emotional reasons, I've kept it.
I recently opened up an HSA and went with my local credit union (although they are as large as many banks). They had less fees, but fees, none-the-less. I also required some special assistance, and they were more than willing to help.
Moral of the story, regardless of whether it is a bank or credit union, get to know the local people in charge.
Credit Unions themselves are getting squeezed with some recent NCUA take-overs of a couple of Corp CUs. Just know that you are in control. It is your money. Shop around if you have to.
ChrisCD :O)
I thought if exclusions to the fee change APPLY to us, we would be fine... However, that sentence said the exclusion(i.e. exemption from the fee) does NOT apply to accounts opened after 4/20/07. If you opened MyAccess account online MORE than 2 years ago, you should be fine.
I totally agree with you. Their size feels less comforting than scary, like everything is verging on out-of-control. Worse still, their staff acts oblivious and don't care. I think a big part of their problem is excessive fragmentation and lack of integration.
Absolutely correct. BofA needs to stop allowing people for whom English is not their first language to write such things. I considered the possibility they were purposely obfuscating the message, but then I dismissed that notion. They are simply not smart enough to **** up so badly on purpose.
I'm pleased to have clipped BofA for $600 back in 2007. I did the U of Iowa deal twice and opened the checking account. Not saying I'll be even after they steal my tax money, but I will be better off than I otherwise would have been absent the 2007 windfall.
union cd .I live in NO. CALIF and there are a bunch of them here. but the hoops you must jump through have stopped me . tried 4 credit unions and at the last minute some thing came up that made it most difficult . I gave up even though most are paying more then the banks .
dont know why they make it so difficult
As with any financial institution, you fill out an application.
They do check you out with ChexSystems or a credit agency to make sure you are well behaved, but so will any place you open an account.
But then she noticed that I had opened the account online, and assured me because of that fact my account has a permanent monthly maintenence fee waiver.
We'll see come June if this is indeed true...
And next year, we'll see again...
April 26, 2009 @11:19AM PST
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You: I understand that BofA will be starting a $8.95 monthly fee to MyAccess checking accounts. I just opened an account with a bonus for being a BofA credit card holder and the application process indicated no monthly fee and no minimum balance required. Will this new fee apply to my account?
John: Thank you for being a valued customer! No, when the MyAccess Checking Account is opened online, the account's maintenance fee and balance requirement are waived for the life of the account.
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