Credit Unions Don't Want Your Money
Please take it. No really.
(h/t Dan from CreditCards.com)
Las Vegas Review-Journal:
Nevada Federal Credit Union has a deal for big savers: Withdraw your money and you'll get a bonus.
The credit union, one of the largest in Nevada, figures that deposits from members who don't have a checking account, mortgage loan or any other products are expensive.
Brad Beal, chief executive officer of Nevada Federal Credit Union, estimates that about 1,600 of Nevada Federal's 85,000 members only use the credit union for savings.
The financial institution typically uses member deposits, including certificates of deposit and money market accounts, to make loans, which typically bear higher rates than deposits.
Beal figures those interest-bearing accounts are a money-losing proposition in Nevada's current depressed economy.
"We don't have any loan demand right now," Beal said.
The credit union is investing in short-term Treasurys and earns about one-quarter of 1 percent on those government securities on average, but it was paying 0.4 percent to customers with savings.
In addition, the credit union expects the National Credit Union Administration to boost deposit insurance premiums by 0.15 percent to 0.4 percent this year.
For each $100 million in deposits, that premium increase will increase Nevada Federal's costs up to $400,000 yearly, Beal said.
American Express tried this awhile back (you have to move quickly in this economy) and it worked out well for them but it might be a bit late now for credit unions to get smart and stop putting their pennies in Treasurys. Hahahahahaha LOL hate to say I told you so (not).
Nevada, of course, has been hard hit by the recession because it's impractical to fund a giant playland in the desert - make that two of them, one which yours truly used to call home - and we all know the Californians don't have the money to make those Reno trips any more. Ooops. Poor planning on your part does not constitute an emergency on mine.
The credit unions are genius. But really, $75 if you withdraw $75,000? Chase gave me $150 just to OPEN an account and only deposit $100! Come on, credit unions, keep up.