Should You Join a Credit Union?

How to get a higher return on deposits and lower rates on loans.

Related Topics:

•  

If you're eligible, yes. And you probably are. It used to be that you needed a certain employer to join. Now, just living in a specific area might be all you need to cash in on higher interest rates for deposit accounts and lower rates on loans.

Recently, the average interest rate on a credit union (CU) money market account was 0.75 of a point higher than the bank average; the typical CU credit-card interest rate was nearly 3 points lower than a bank-issued card.

"In the long run, that can really add up to savings," says Jan Dahlin Geiger of the Financial Planning Association, who has been a CU member for 35 years. At CUs, which are nonprofit, earnings are returned to the members in the form of lower loan rates or services such as free checking. The one thing you won't save any money on: 30-year mortgage rates. CUs and banks tend to have similar rates.

Not sure where to find a CU? Visit www.creditunion.coop or call 800-358-5710. And you may still want to keep a bank account for easier ATM access.

From Reader's Digest - September 2006

 

• How to Get Out of Debt and Get Rich
• With the right attitude and a little credit know-how, anyone can climb out of the hole and stay debt-free for life.
• 
• 12 Ways to Keep More of Your Money
• Top financial planners give their best advice -- free of charge.
• 
• Charge It -- and Save
• Saving money can be tough, so new credit cards are helping us do it while we spend.
• 
• Are You Saving Enough?
• Project your accounts, investments, savings, and expenses.
• 
• Protect Your Nest
• Nine fail-proof ways to ensure your family's financial well-being.
•