Credit Unions Offer Better Rates!

borrow_r1

Credit unions continue to offer strong interest rates on deposit products, shutting out banks once again and staying high above the national averages, according to a recent survey by GOBankingRates .

Across the board, credit unions were ahead of banks with numbers such as:

  • Savings: Credit unions, 0.14% annual percentage yield (APY) vs. banks, 0.11%;
  • Checking: Credit unions, 0.31% vs. banks, 0.20%; and
  • Money market: Credit unions, 0.19% vs banks, 0.15%.

Certificate of deposit rates at credit unions ranged from 0.08% higher than banks for a six-month CD all the way to 0.29% higher for a 60-month CD.

GOBankingRates surveyed interest rates for more than 26,700 deposit accounts offered by banks and credit unions in the U.S. as of April 1, with an assumed deposit of $10,000. It did not include rates for online-only financial institutions.

“Our goal is to encourage our members to use GLCU as their primary financial institution,” John Skul, assistant vice president of marketing, Great Lakes CU, North Chicago, Ill., told GOBankingRates (April 9). “Offering them a fantastic rate is a win-win for both GLCU and our members–they receive a great interest rate on their checking account and we benefit when they meet the criteria to receive the great rate,” he added.

The top 10 credit unions and their products are:

  • Alabama Telco CU, Birmingham, AL. The credit union’s Centsible Savings account works like a “keep the change” savings program and has 3% APY.
  • Great Lakes CU, Chicago, IL. The Ultimate Checking account is a rewards account with 3% APY and up to a $5 ATM rebate per month.
  • Gulf Coast Community FCU, Gulfport, MS offers the Kasasa cash checking account, which earns 3% APY on balances up to $25,000.
  • Lake Michigan CU, Grand Rapids, MI. The Max checking account pays 3% APY on balances up to $15,000, with no fees and no minimum balance requirements.
  • Meridian Trust FCU, Cheyenne, WY. The MaxRewards checking account pays up to 3% APY and charges no maintenance fees.
  • Partner Colorado CU, Arvada, CO. The high-interest checking account is a straightforward high-yield account that pays 3% APY as long as account holders complete 20 signature-based debit card transactions, receive e-statements and use online or mobile banking.
  • UniWyo FCU, Laramie, WY The maximum interest rate–currently 2.99% APY–is paid on balances up to $15,000.
  • DuPont Community CU, Waynesboro, VA. The credit union offers 2.78% APY on its Grow Green checking account when 15 debit transactions are performed each month with an amount of at least $250.
  • IC FCU, Fitchburg, MA. Intelligent Checking is a high-yield checking account with no monthly fees. Balances up to $15,000 earn 2.59% APY.
  • University of Iowa Community CU, North Liberty, IA The credit union’s Rewards checking account offers 2.5% APY on balances of $0 to $19,999.

To join your local credit union with great rates like these, visit asmarterchoice.org!

If your wallet has the wedding bell blues

budget_r2

Congratulations!  If you were recently married or are in the process of planning a wedding, you’ll contribute to the $71 billion that the bridal industry pulls in each year!  While the wedding bells may still be ringing in your ears, it’s time to get back to real life.

Maybe your car is on its last mile, your spouse wants a bigger place, or you still need to pay off wedding debt, now is the time to do some financial goal setting.  Here are few tips to get you started:

  • Make a list of short- and long-term needs and wants. Is there a new car or house in the future? Set a savings goal to cover a down payment by determining the cost of each goal and the amount that needs to be saved each month to achieve it on time.
  • Build an emergency fund, pronto.  Experts suggest that you have three months of living expenses in liquid funds to cover emergencies like unemployment or car repairs.
  • Develop and stick to a budget that includes financial goals. Make sure to revisit it to reassess the goals’ status.

Need some help goal setting?  Find a local credit union in your community here or visit asmarterchoice.org

Original information from Bankziety

Why don’t credit unions pay federal (corporate) income tax?

You may not realize this, but your credit union doesn’t pay federal (corporate) income tax.  Watch this video to understand why or read on! 

Credit unions were created to provide financial services in a democratic, not-for-profit, cooperative manner—that is, with member ownership and control. Those characteristics are the foundation of the tax exemption.

Early in the history of credit unions, the U.S. attorney general declared state-chartered credit unions exempt from federal income taxes because they were “organized and operated for mutual purposes [in which an organization’s members share in the profits and expenses] and without profits.”

Later on, in the 1930s, legislators passed a law to exempt federally chartered credit unions from federal income tax for the same reason. Today, legislators continue to maintain that status because credit unions, while growing and changing, still operate in this unique way.

Credit unions’ boards of directors serve as unpaid volunteers, elected by members. Credit unions return all excess income to members, in the form of higher deposit rates, lower loan rates, and lower fees. Credit unions don’t need to create profits to pay stockholders, as do banks.

The amounts banks pay stockholders dwarf their tax bills: Bank cash dividends to stockholders have exceeded bank applicable income taxes each and every year for more than 20 years, and bank cash dividends have exceeded bank taxes by a total of $416 billion over the past 20 years.

All Consumers Benefit 

All taxpayers, whether members or not, benefit from the presence of credit unions in the marketplace.

Credit union competition helps keep bank and savings and loan prices lower. For example, credit unions offering credit cards charge an average one to two percentage points lower interest than other lenders. Imagine how expensive other lenders would make credit cards, or auto loans, if they didn’t have to compete with credit union rates.

Bankers say the tax exemption gives credit unions an unfair and unwarranted privilege that puts banks at a competitive disadvantage. But in the past two years alone, bank assets grew by $1.13 trillion—that’s more than credit unions have grown since they began operating in the U.S. more than 100 years ago: Bank assets grew to $14.5 trillion at the end of 2012. Total credit union assets at year-end 2012 were $1 trillion.

Tax Repercussions

If credit unions paid income tax, the contribution to state and federal treasuries would make not one penny difference in the taxes you pay as an individual. But the effect such taxes would have on how much you pay for credit union loans for cars, education, and houses, or the dividends you earn on credit union savings, would be significant.

Just as banks pass along their tax payments in fees and interest rates, credit unions would have to pass along that expense to members, also in the form of higher fees, higher loan rates, and lower savings dividends. Credit unions, if taxed, also would have to take the money from funds otherwise dedicated to reserves—the cushion protecting all members and the credit union from economic shifts. Again, not-for-profit credit unions aren’t like banks, which have profits aplenty.

Credit Unions Do Contribute 

All taxpayers have legitimate concerns about the federal budget deficit, and state deficits as well.

Credit unions and members already participate in reducing those shortfalls. You pay taxes on dividends your credit union accounts earn, and your credit union pays all taxes but income tax.

Credit unions are not-for-profit, democratic, financial cooperatives that serve members. As long as that’s true, they’re earning their tax status.

Family Fun While Staying on Budget

spend_r1

Consumers Credit Union offers these tips and suggestions to staying on budget this spring and summer:

A lot has changed in the world of kid-friendly, affordable vacations. Today, there are boundless ways families can vacation together at reasonable rates.

A growing number of airlines, resorts, cruise lines, theme parks, entertainment centers, restaurants, and sports facilities have responded with discounts to attract families. Here are a few tips to consider.

Travel off-season, and you may cut the cost of your trip in half. The best deals usually are at outdoor oriented destinations like ski resorts during the months of November and April and national parks in late fall or early spring.

Don’t forget about using frequent flyer miles for free family travel.

Did you know most airlines offer half-price seats for children younger than two? You may be able to use an unsold (free) seat for your toddler if you book your flight during an off-peak time, when the flight is less apt to be full.

How do you find reasonably priced airfare/resort packages? Even with apps and the Internet, consider consulting a travel agent. They can often find deals you would otherwise be unaware of.

The best lodging deals are where kids (usually under 12) dine free, have connecting rooms with parents for free or half price and can access all of the resort’s children’s programs at no charge.

Before you book a cruise, find out what cruise ships cater to kids. Compare costs of “extras” before booking a cruise. On some ships, soft drinks, baby-sitting, and fun clubs, packed with daily activities, are free. On other ships, there are charges for these services.

Meals can be one of the costliest spending areas during a family vacation. The key is to bring along food that doesn’t need refrigeration. Or try to book a place with a kitchenette so you can prepare your own meals.

Credit Unions are here to help you succeed with your financial goals.  To find a credit union you are eligible to join, click here or visit asmarterchoice.org

‘Project Money’ Participants Stage $44,000 Turnaround

cudiff

Like many young couples, Stacey and Brandon Steinmetz struggled to make ends meet and relied on plastic for day-to-day purchases.

But thanks to their participation in Summit Credit Union’s “Project Money,” they radically transformed their financial position in just seven months.

By reducing their debt by $29,982 and increasing their savings by $14,402 in that span, the Steinmetzes earned the $10,000 grand prize in the Madison, Wis.-based credit union’s fifth-annual competition.

Summit Credit Union honored the 2013 Project Money finalists at a reception. Runners-up each received $2,500.

A weighted scoring system based on gross household income that rewards savings increases, debt reduction, and participation in program events determines the winner.

Collectively, the four competing teams boosted their savings by $40,484 and reduced their debt by $62,916.

“To live our lives deliberately to achieve our goals and dreams is so important,” says Kim Sponem, Summit’s president/CEO. “The Project Money contestants made very deliberate and difficult decisions over the past year. They found that the little things make a big difference.

“While Project Money is a contest, it’s really about making changes that will put people on a solid course toward reaching their dreams and being financially stable for their families,” she continues.

The Steinmetzes credit Project Money financial coach Chris Bethke with teaching them how to think differently about money and the importance of communicating with each other about finances.

“We used to hate talking about money and it was a real stress on our relationship,” Stacey Steinmetz says. “We went from living on a budget that was dictated by our latest paycheck to a budget that has us planning for the future and living without credit cards.”

In addition to drastically cutting back on eating at restaurants, the Steinmetzes dialed up their fix-it skills to repair their garage door, moped, and exercise bike rather than hiring help. They made their own laundry detergent and planted a vegetable garden.

“Stacey mentioned that Project Money is not a sprint, but a marathon. They made changes that weren’t always easy, and they formed new habits,” Bethke says.

“Ultimately, they attained goals they couldn’t even dream about six months ago.”

Click here to read about each participating family’s journey, and learn about the 2014 adult Project Money competition—as well as a new contest for teens.  You can participate at home or check to see if your local credit union offers a similar program.  If you’re not a member of a credit union, click here or visit asmarterchoice.org to find one that is right for you!

Original article by Adam Mertz, appeared in Credit Union Magazine.

Competing Financial Priorities

borrow_r1

Post originally appeared in Money Mix

Numbers show that Gen Y is delaying buying homes, getting married, and having kids. We’re facing high sums of student loan and credit card debt. We’re struggling to save any money for retirement or emergencies. We’re getting jobs and looking to grow in our companies in a time when older workers are staying at their jobs longer because they cannot afford to retire.

We move home to live with mom and dad because the costs of living are more than we can afford with all our debt and lack of adequate paying jobs. Not only is the U.S. economy volatile, but the global economy is struggling. We’re told that we need to eat the more expensive organic this and grass fed that to be healthy. We’re encouraged to buy things we think we need or go on vacations we can’t afford because we deserve them. We have to pay more for health care and medicines because companies no longer offer the benefits they did in the past.

The list goes on and on. No matter what your age or generation, you’re constantly asking yourself, where do I even start?

It’s a daunting task to even begin to set priorities. There’s only so much money to go around and endless ways to spend it. Should you save? Pay down debt? Buy the more expensive, yet healthier, food choices. Do I go on the vacation now when I’m able to do more, or hope that I live long enough to go when I retire?

I have these thoughts every day. Sometimes, I’m so overwhelmed with everything that I do the worst thing possible—I ignore it. I just keep going and hoping that one day soon, I’ll have the time and mental capacity to do something about it. But days and years go by.

Our financial behaviors are influenced by so many different things. Status quo bias is when you prefer what already is to making a change. It’s easier to do what you’ve always done than to change it. We avoid complexity when it comes to making decisions. When it comes to money and figuring out the best way to allocate it in our budget, we get so confused/frustrated, we don’t do anything.

So where do we start? That’s a tough question. For myself, I know that my biggest issue facing me right now is being financially vulnerable if an emergency would happen. After that, my next biggest issue is having too much debt holding me back and costing me. Think about where you are most vulnerable. Once your vulnerabilities are taken care of, think about your goals. Is it to buy a home? Travel? Retire comfortably? Focus your attention and funds to your goals. I have to constantly remind myself that other people’s priorities are different from my own. I don’t need to do what society, culture, the past, or my friends say I should.

I think each person should make the decision of where to start. But once you start, it’s important to stay focused on that goal. Behavioral economists and habit researchers suggest breaking large goals into small, one-step action items. Take it five minutes at a time. Schedule it. Do whatever it takes to make it happen. The hardest part is starting.

What are your thoughts? Do you feel overwhelmed by what you need to do or what you’re told you need to do? How do you cope?

Staying on Budget

fin_edu

From our friends at We Own Our Bank, today’s topic offers tips to stay on budget.

Creating a budget can be tough. Staying on budget can be even tougher. Luckily, your credit union has all the tools you need to make that happen. Here are some tips for staying on budget without getting frustrated and throwing in the towel.

  • Cash is King: Take out enough cash to last one week at a time. Make up your mind that the cash you have is all you get for discretionary expenses, or things you could live without, each week.
  • Eliminate Bad Habits: Put the money you use on items like alcohol or impulse shopping sprees toward your other expenses, such as credit card debt.
  • Pay Down Debt: Choose one card—ideally, the one with the highest interest rate—and pay as much as you can on it every month, while you pay minimums on the others. Continue on the same path with your other cards until you are debt-free. One other thing: You must stop using those cards as much as possible.
  • Keep track of your spending. You’re less likely to overspend if you realize how much money has actually gone through your hands.
  • Balance Your Checkbook: If you balance up every time you get a bank statement, you can make sure you stay on target with your budget.
  • Analyze Your Spending: Look through your budget and all your receipts. Can you find an expense that can be cut? Cutting Starbucks or eating out for lunch every day can increase your money flow for other expenses or savings.
  • Consider Special Accounts: If you have a hard time saving, consider using direct deposit. What you don’t see, you won’t miss, and the savings can add up quickly. If you keep reaching into your savings, then set up a CD (Certificate of Deposit) or an account with early withdrawal penalties.
  • Create Some Wiggle Room: Try to allow some extra money for unexpected expenses.

Following these tips can help you stick to your budget. And you can feel good about keeping your finances under control. First, however, meet with your credit union representative today to determine the programs and services.  Looking for a credit union to join?  Click here or visit asmarterchoice.org 

Credit Unions Raise millions for CMN Hospitals

asc13_blogcudiff_r2

The late blooming of Washington’s Japanese Cherry Trees didn’t dampen the enthusiasm of the 15,000 runners who signed on to help raise almost a half-million dollars for Children’s Miracle Network Hospitals (CMNH) Sunday.   Credit Union Miracle Day’s 2014 donation of $487,000 will bring the 13-year total of funds donated to Children’s Miracle Network Hospitals nationwide to well-over $6 million. Approximately $102,000 of the total was raised by runners and their families and friends alone. 

nn040414_5

For the 13th consecutive year, CUNA volunteers helped to tag, stow, secure and then return the thousands and thousands of bags of runners’ personal belongings. (CUNA Photo)

A record number of members of Congress became honorary race chairs of the event this year–231 representing all 50 states. Capitol Hill staffers also are present among participants in the race, which was awarded most popular D.C. race by readers of Washingtonian magazine last year.

Also arriving with much spirit were the many credit union volunteers. They hit the National Mall in chilly pre-dawn hours to back the runners by setting up support stations, and stayed through a beautiful sunrise and during the festive after-race activities.

The volunteers, like the Credit Union National Association’s faithful crew at the baggage check-in tent, helped stow the personal belongings of the racers, helped organize thousands of bananas for post-race distribution, pointed the way to the right starting spots at the right time, handed out space blankets to each finisher, and lined up medals and awards to recognize achievements, among other support activities.

nn040414_4

The participants pictured above appear to have won a whole lot of good feelings with their finishes. (CUNA Photo)

Credit Union Miracle Day became the title sponsor group of the now 42-year-old race in 2002 and will remain so through 2016. The effort is a collaboration of 101 credit unions and 48 business partners and credit union service organizations, including lead partner PSCU.

Children’s Miracle Network Hospitals are an alliance of premier children’s hospitals that treat 10 million critically ill children each year, regardless of their ability to pay.

The donations are made under the umbrella of Credit Unions for Kids, one of the top three corporate contributors to Children’s’ Miracle Network nationwide.

The race, as always, boasted a star-studded field. It included defending champion Janet Bawcom, who broke a record and finished second, U.S. Olympians Jen Rhines and Blake Russell, Sara Hall and Lindsey Scherf on the women’s side. Participating in the men’s field were Matt Tegenkamp, Mo Trafeh–winner of the Half Marathon and 25K USA Championships in 2013–Christo Landry and Matt Llano.

The runners competed for a total of $81,800 in prize money, the largest amount awarded at the race to date.

Also on Sunday, the third annual Credit Union SacTown Ten-Mile Run took place at the State Capitol in Sacramento, Calif. Nearly 2,000 participants signed on for the event which features a 10-mile race, a three-person relay and a kids’ Miracle Mile.

The 2014 Run serves as the Pacific Association 10-Mile Championship, Parties interested in the credit union fundraising effort can use the resource link below to make a contribution.

The Secret To Being Rich

fin_edu

What does being rich mean to you?  As part of Financial Literacy Month, it’s important to consider all aspects of your money, and how it affects your behaviors.  Have you talked to your kids, or family, about how your money behaviors affect them?

Here, The Disclosures, “musicians with a mission”, offer a message to kids and adults alike about what it means to be rich:

Financial Literacy Month is in Full Swing!

cudiff

Credit Unions across the country kicked off Financial Literacy Month with a wide variety of events.

Youth financial literacy–particularly the Jump$tart Coalition–was noted by Pennsylvania Gov. Tom Corbett as he officially proclaimed April as Financial Education Month. His proclamation also recognized the work Pennsylvania credit unions do to support financial education and National Credit Union Youth Week.

Through the end of April, 1st Financial Federal Credit Union, Wentzville, Mo., will provide free credit score counseling, credit history review and credit rehabilitation to its members.  “Many of the people I meet don’t know what is available in their credit report. Most are unsure who they can trust with fixing their credit,” said Nancy Tate, lead financial service representative at 1st Financial.

Credit unions are using Facebook and Twitter ( # FinancialLiteracyMonth ) to invite consumers to come in and learn about getting their finances in order or to lead them to resources such as Smart about Money from the National Endowment for Financial Education. New Castle County School Employees Federal Credit Union started off the month by sharing 10 tips to cut spending on its Facebook page.

The Kansas Credit Union Association shared an interview from KAKE-TV ‘s “Moms Everyday.” Kristin Smet, youth and education coordinator at Credit Union of America, Wichita, Kan., explained how financial literacy affects all age groups. During Tuesday’s segment, host Rachel Phillips noted that “credit unions are really special” for their education efforts throughout the community.

Credit Unions are a Smarter Choice!