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Is banking at a credit union akin to buying locally?

Discussion in 'Fred's House of Pancakes' started by burritos, Feb 12, 2010.

  1. burritos

    burritos Senior Member

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    My money is in a mega bank. Propped up by taxpayers. Nickel and diming the customers ad infinitum. I'm thinking of going to the local credit union. Good idea?
     
  2. Darwood

    Darwood Senior Member

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    Check the ownership, but you're probably right.
     
  3. Danny

    Danny Admin/Founder
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    I use BofA as my "I'm not in my hometown and I need to find an ATM" bank and keep a majority of our money in a local credit union. The rates are always better and the service is much more personal.

    But I do love the technology that BofA has - especially here in Charlotte where they test their next-gen ATMs.
     
  4. Alric

    Alric New Member

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    Here is some info on the movement:

    Move Your Money

    The best argument is that it will save you money. If you make the comparison keeping your savings in local banks and credit unions reduces fees which in the long run results in higher returns.
     
  5. Proco

    Proco Senior Member

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    I've belonged to credit unions since I was a kid and will only use a bank as a last resort. Credit unions are non-profits and don't have shareholders, so they're able to give better rates on accounts. I've also always had nothing but good service when going to a branch. Even now, when I do most of my stuff online, if I go to my local branch I get treated like a valued member, not just another customer.

    Also, credit unions have an extensive network of ATM's that are surcharge free. I can go to pretty much any credit union ATM and not get hit with fees. If I'm traveling it might take a little bit of sleuthing before I go, but I can usually find something.
     
  6. daniel

    daniel Cat Lovers Against the Bomb

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    I banked at a locally-owned bank with a reputation for keeping money in the community and good personal service. Then they were bought out by a regional bank chain and I switched to another local bank. Then, while I was out of the country they were bought out by the same regional bank, and changing banks from overseas was too much of a hassle, and by the time I returned home, the regional bank was bought out by a national mega-bank.

    That bank has such a reliable and easy-to-use on-line system, and nation-wide ATMs and reciprocal agreements with overseas banks, and an essentially free on-line brokerage, that I stuck with it. They even refund the ATM fees and "currency conversion" fees that other banks charge me when I'm traveling.

    But most of my money is wherever I can get the best interest rate, or else in mutual funds. The mega bank never has good interest rates. You find better rates by shopping around small local banks, which will offer good rates when they need money. Except now, when rates are in the toilet. Now you need a good broker to find bonds that are not too risky and paying a good rate.

    But banking at a credit union is definitely more politically correct.
     
  7. dogfriend

    dogfriend Human - Animal Hybrid

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    I used to have an account at BofA years ago, but wasn't happy with the service or the amount they charged me for holding my money in a checking account. Then I did the math and found out that I could still use BofA ATM machines and pay less per month in fees by switching to the credit union.

    We recently paid off the mortgage on our house and I'm still appalled at the poor customer service / lack of communication by BofA (they took over our mortgage by taking over Countrywide Home Loans). My dad still has an account with them, but I'm done with them for good.
     
  8. icarus

    icarus Senior Member

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    Credit Unions rule!

    Neighbours banding together with neighbours' keeping the money in the community, keeping the net profits in our pockets, and perhaps most importantly keeping the decisions local.

    I have taken all my money out of the large bank(s) and it is all in the CU.

    Icarus

    PS. No fees, very good mortgage rates, free atms, free cashiers checks,,,,, all the stuff the big bank charged me for, including free safe deposit boxes!
     
  9. TonyPSchaefer

    TonyPSchaefer Your Friendly Moderator
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    I bank at Harris Bank here in Chicagoland. They are local to Chicago. When I visit the local branch I'm recognized. A year ago when we opened a CD, I asked offhandedly about bank-owned homes that we could buy on the cheap and mortgage through the bank. The woman said, "we don't have any of those. We don't do risky mortgages so we have no defaults. I mean, who wants to deal with foreclosures?"

    That's the bank I stick with.

    And I'll not soon forget one of John Stewart's guests talking about large, bailed-out-but-giving-huge-rewards-to-execs banks. He said that in response to the statement "they are too big to fail," he did his part towards making them a little bit smaller by moving his money to a small, local bank. He then suggested that everyone do the same and bank locally.
     
  10. Alric

    Alric New Member

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    Just wanted to reitarate. This is not a liberal/libertarian/conservative issue. You keep or make more money with a local bank or credit union for two reasons.

    If they do invest your money it will be in less risky investments.

    Less fees means a lot more money due to compound interest in the long run.

    Similarly if you do mutual funds avoid big names like merryl lynch or schwab. Go with Vanguard funds for the same reasons less risk and lower fees. In the end they perform the same but due to lower cost you end up with more money with Vanguard.
     
  11. qbee42

    qbee42 My other car is a boat

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    I keep most of my money in investments. It doesn't make economic sense to keep a big wad of cash in the bank.

    Tom
     
  12. daniel

    daniel Cat Lovers Against the Bomb

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    I pay no fees at my mega-bank. I have a few of my no-load mutual funds in their free brokerage, and with that they consider me a high-value customer and waive the service fees they charge other folks. As for interest rates, a smaller regional bank offers higher rates than the local credit unions. But I still agree that credit unions are a better concept.
     
  13. icarus

    icarus Senior Member

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    Here is one for you.

    Let me preface by saying that we are relatively new members of this particular CU,,~2 years. When interest rates fell last year we thought about refinancing. To make a long story short, the CU was as competitive with rates, points as everybody else, but where they really shined was the honesty and lack of junk fees! We paid the actual invoice cost of the appraisal, no credit report fee, no mark up on escrow fees.

    The most amazing thing was the ease of closing. I have had dozens of mortgages over the years, and being self employed (especially in this environment) has made closings a nightmare. At the last minute they always want some obscure tax return or piece of paper from 10 years ago.

    With the CU, we pre-qualified, waiting until we though rates were as low as they were going to go, (4 3/8%!!) and made the call, Monday afternoon. Appraiser came out Wed, with a report back Thursday PM. This was a tricky Re-fi in that we wanted to pull as much out of the house as possible to pay off the mortgage on a rental in the process so we didn't know until the appraisal came what the principal was going to be. The appraisal was right where I though it should be, made the call to the CU on Fri am. The following Fri Am we closed, with the payoff check to pay off the the other mortgage in our accunt that day, and wired on the following Monday. No muss, no fuss, no mistakes, no endless nickel and dimeing.

    Now jump forward 6 months, we had an unexpected windfall come in that allowed us to make a substantial paydown. Even though we were only 6 months into the mortgage, because they service the loans, and can buy them back if they wish, they let us pay down the principal by one third, and then readjusted the P&I payments to reflect the lowered principal. All without charge.

    Like any financial institution, they have had some folks fall upon hard times, but since they portfolio a number of their loans, and since they service them, and can buy them back, it is very easy for them to re-negotiate a note if needed to avoid foreclosure.

    I have always asked (metaphorically) banks what is better 100% of nothing or 75% of something. Forcing someone into foreclosure make almost no sense most of the time. The problem is the original mortgage originator has little say in the matter once they have sold the paper, and then getting some remote owner to agree to reconsideration (if you can even find them) is nearly impossible.

    Keep it simple, and keep it local if possible. Why as a depositor why do I want my money (including profit) to go to Wall St. when it can go to my own main street. It really is a no brainer.

    Add in nationwide ATMs, no fees etc and it really becomes a no brainer.
     
  14. burritos

    burritos Senior Member

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    I set up accounts for my children. I was thinking of moving my money into the CU, but they don't do corporate accounts(a must for me) and they don't do loans for investment properties.
     
  15. icarus

    icarus Senior Member

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    Mine does mortgages on rental houses,,1/4% above the owner occupant rate if memory serves.
     
  16. mrblaise

    mrblaise Go Lakers!!

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    I bank at a locally owned bank. It's far superior service and it's a great feeling when you walk in and most of the people know you on a first name business. Plus, I know that the bank makes loans to local businesses that probably wouldn't be able to get loans at a mega bank like B of A.