I've (gasp) joined a credit union
The other day, I did something I never thought I’d do.
I joined a credit union.
The credit union I selected was Alliant, based in Chicago. It has a four-star Safe & Sound rating from Bankrate.com.
But its identity, location and rating aren’t so important. What’s really important is that I’ve set aside prejudices and misperceptions I’ve had for years.
First, I’ve always viewed credit unions as savings institutions for employees of a common employer, members of a social organization or residents of an identifiable geographic area.
Besides, I thought, they were for smaller savers or borrowers, not someone like me with a substantial nest-egg to protect and no need for credit.
Further, I’ve never been comfortable being a "member" of anything, even a financial institution.
Having abandoned equities over time, I didn’t want to own "shares" paying "dividends." I wanted a "deposit account" paying "interest."
Also, credit unions didn’t seem as safe as banks -- somehow.
Of course, the current interest rate environment has forced me to reexamine these notions -- and to reject them as basically ridiculous.
By reading websites like this one, I’ve learned there are credit unions offering membership nationwide and for which the required "common bond," or "field of membership," among those eligible to join is negligible or nonexistent.
In the case of Alliant (alliantcreditunion.org), all I had to do to qualify was make a $10 donation to a good cause -- the Orphan Foundation of America.
The websites also led me to information that convinced me that, from a saver’s standpoint, a credit union wasn’t that much different from a bank and was as safe.
After all, while some differences exist between a "certificate share" and a "certificate of deposit," they’re very much alike in substance.
And the "share insurance" administered by the NCUA, like FDIC insurance, is backed by the full faith and credit of the United States.
Anyway, at the end of the day, I was impressed by some of the rates I saw online offered by credit unions. (It also helped that Clark Howard, my favorite consumer advocate, is also a fan of these institutions.)
So far, I’ve only put a small amount into an Alliant savings account (with a solid 1.15% APY).
I’m waiting for some megabank CDs to mature to plunge into a certificate.
I hope Alliant’s competitive rates for jumbo certificates hold up (or improve) between now and then.
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