A friend recently told me how proud they were to have been a
Wells Fargo Customer for the last 15 years. Knowing that Wells Fargo is not competitive, I showed her the interest rates at her bank as well as their fee structure and then compared it to a local
credit union. Now that loyalty felt more like she was getting taken...
Had she simply been at the credit union vs. her bank the $1000
she had would have made $61.37 per year instead of the 0.50 that she made at Wells
Fargo. We can make more than that picking up change in a parking lot!
As far as banks are concerned Wells Fargo is one of the
least competitive banks as far as taking care of their customers. Most banks
fall into similar categories.
I know what you are thinking, “BUT I’VE BEEN THERE FOR SO
LONG!”
This is irrelevant. It is a simple process to change direct
deposit information and to switch over your accounts. You work hard for your money;
don’t let the banks take it away without a fight. Don’t be lazy, make the
switch.
The bottom line is banks have no loyalty to you, so you
should not be loyal to them. I don’t care how friendly your banker is or how
cute the teller is at the counter, if your bank is charging you fees and not
paying a competitive interest rate on your checking and savings accounts, it is
time to find another financial institution.
What to look for in a new bank/credit union:
-
Do they charge monthly fees?
-
What is their interest rate?
-
Do they charge ATM fees or have other hidden
charges?
-
What is the minimum balance for the account?
Fees: Majority of credit unions do not charge monthly fees, maintenance
fees, and refund ATM charges. If your bank has fees THEY ARE NOT
COMPETITIVE.
Interest Rate: Wells Fargo pays… I’m sure their rate is
around here somewhere. Oh, it’s buried under loads of fine print. You may have
guessed why… THEY ARE NOT COMPETITIVE.
Minimum Balance: Some accounts only pay interest if you have
a certain amount of money in the account. Be sure to check what the minimum is
to ensure your money is making the maximum amount of interest. If they want
something crazy like $2500 to pay you any interest, you guessed it, THEY ARE
NOT COMPETITIVE.
So where should you bank?
These are my recommendations in
order of preference based on the interest rates/benefit to customers:
People’s Community Credit Union
Twinstar Credit Union
Addison Avenue Credit Union
iQ Credit Union
Twinstar Credit Union
Addison Avenue Credit Union
iQ Credit Union
(I am not a representative for any of these establishments however I have had accounts at all 4 CU's listed)
Note. You do not see any big banks such as BofA, Chase, or
even COLUMBIA CREDIT UNION (That one is really popular for some reason even
though they ARE NOT COMPETITIVE).
Want me to review your bank or credit union? Send me the link
to their site in the comments box below and I’ll be happy to check it out for you.
What are your thoughts on USAA as a military friendly bank with respect to those deployed/stationed overseas?
ReplyDeleteHello Chris, I apologize for my delayed response. As a vet myself I use USAA for my insurance however not for my primary banking. They do have great customer service and I love that they support the military community however I still believe in parking money where it makes the most interest.
DeleteIf you go to USAA.com you will find it is very hard to find the current interest. This is typically an indication that the financial institution does not offer competitive rates. The good news is they tend to be good about not charging fees which leaves them at somewhat of a neutral rating from me.
I verified their current interest rate, and as of today it is 0.01%APY on both a checking account and a savings account. This translates to 1 penny for every $100 you have in your account each year.
As for being overseas. I’d look into the Savings Deposit Plan (this is a military program) for majority of your money. This will pay 10% on the money deposited while you are deployed. Typically while deployed you make a decent income so it is very feasible to max out the monthly contributions to the plan. Note it is not an IRA. At the end of the deployment you will get the money you deposited back plus 10% interest. You’ll want to speak to whoever is handling pay issues in your unit to enroll in this plan. This would help offset the lack of interest you’d be making through USAA while you are gone. Then when you get home move to a different account that pays better.
Thank you for your service!
Unitus CCU? www.unitusccu.com
ReplyDeleteHey Amber! I have had an account with Unitus CU in the past. I opened the account because they ran a promotion where you would get a free iPod. I received my iPod in a timely manner and they had good customer service.
DeleteThe problem is that they do not offer a competitive interest rate on their accounts. Remember inflation is currently at least 3% so if your money is sitting in an account at 0.05% you money actually loses 2.95% each year as far as buying power.
Also to put it into perspective, $100 at 0.05% is 5 cents per year. A simple solution would be to switch to Twinstar CU Accelorator Checking Account which pays 2.25% APR. This would mean you’d make $2.25 per $100. That’s 45 times the interest you’d make at Unitus.
Source: https://www.twinstarcu.com/rates/deposit/Checking