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Thread: I just found out my credit union

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    Featured Member Fawn's Avatar
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    Default I just found out my credit union

    Is only giving me 1% interest on my savings account which holds a few thousand $$$. My mom says I can find one that;ll pay be six if I look. Got any ideas? I hate dealing with the bank people, they are always so rude to me.
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    Default Re: I just found out my credit union

    ING orange savings account is 4.2% right now with no minimum balance. It's all online so no fussing with snotty bank people.

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    Banned Katrine's Avatar
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    Default Re: I just found out my credit union

    emigrantdirect.com
    hsbc.com
    ingdirect.com

    "Have you ever been to American wedding? Where is the vodka, where's marinated herring?" - GB
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    Default Re: I just found out my credit union

    & capital one money market is terrific as well.

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    Banned Melonie's Avatar
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    Default Re: I just found out my credit union

    ^^^ also e-trade is paying huge interest rates right now

    I would point out however that there is a REASON that these financial institutions are paying very high interest rates ... THEY NEED MONEY - BAD ... because they have taken big losses from toxic 'subprime' investments !

    But I guess as long as the accounts are FDIC insured there isn't much of a downside if any of them wind up going bankrupt .... other than the possibility of having your account frozen while a bankruptcy is being sorted out.

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    Default Re: I just found out my credit union

    Quote Originally Posted by Melonie View Post
    ^^^ also e-trade is paying huge interest rates right now

    I would point out however that there is a REASON that these financial institutions are paying very high interest rates ... THEY NEED MONEY - BAD ... because they have taken big losses from toxic 'subprime' investments !

    But I guess as long as the accounts are FDIC insured there isn't much of a downside if any of them wind up going bankrupt .... other than the possibility of having your account frozen while a bankruptcy is being sorted out.
    And you accuse me of being US centric.

    ING bank (Netherland based) has 1.3 Trillion Euros (or $2 Trillion) in Assets under management(As big as Citigroup).
    HSBC (Hong Kong based) has $1.9 Trillion in Assets Under Management (almost as big as Citigroup)

    I suspect that they can handle a little turbulence in their ship. They are far less riskier than your credit unions or your local banks.

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    Banned Melonie's Avatar
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    Default Re: I just found out my credit union

    the fact that ING and HSBC are under foreign ownership does not mean that they haven't been dabbling in US 'subprime' mortgage debt ...





    (snip)"HBSC takes a big charge
    As Thain will learn, subprime just won't go away.

    HSBC (HBC, news, msgs) said it is taking a $3.4 billion charge in the third quarter to cover weakness in its U.S. mortgage finance business.

    That's much more than the $1.4 billion HSBC had forecast it would take in July. But HSBC said that the losses were "more than offset by revenue growth" in other areas. HSBC shares were up 0.1% to $88.85, however.

    HSBC kicked off discussions of the mortgage mess back in February when it warned that it would take a bigger-than-expected charge for bad debts. Today it had more negative comments about the slumping U.S. housing market.

    "There is the probability of further deterioration if the current housing market distress continues and further impacts the broader economy," finance director Douglas Flint said in a statement today."(snip) from


    As to the future stability of local banks and credit unions, in point of fact this has more to do with the diversity of their customer bases and their exposure to 'subprime' mortgage / auto / credit card debt than anything else.

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    Default Re: I just found out my credit union

    Quote Originally Posted by Melonie View Post
    the fact that ING and HSBC are under foreign ownership does not mean that they haven't been dabbling in US 'subprime' mortgage debt ...
    [/url]


    As to the future stability of local banks and credit unions, in point of fact this has more to do with the diversity of their customer bases and their exposure to 'subprime' mortgage / auto / credit card debt than anything else.

    I never implied foreign ==> No exposure.
    I implied when you have 2 Trillion Dollar under your assets $4 B is pocket change.

    Also, another perfect example of biased Media reporting is fully exemplified in the current crisis. Every year banks takes some risky bets, some pays off some don't. I don't see media or Melonie ever posting a single article saying Citibank/Merrill/ING/HSBC made this bet and they are ahead $3 Billion Dollars from it.

    It is like the New York Post reporting only Yankee losses and conveniently forget to publish articles when they win during a baseball season

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    Banned Melonie's Avatar
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    Default Re: I just found out my credit union

    ^^^ actually I posted a thread about Wall Street bonuses expected to average $200,000 per employee in the Stripper Forum ... as a heads-up for Manhattan dancers who are likely to cash in big time as some of this bonus money starts flowing into strip clubs. However, I also pointed out that the profits upon which these bonuses were based are the results of mergers & acquisitions, buyout financing packages etc. that the big financial houses booked early in 2007.

    Since the subprime derivatives crisis leaked out of the closet last may, there haven't been any resounding victories for any of the big financial houses to report. The mergers and acquisitions deals all turned sour when the secondary market refused to buy any more of this debt, forcing the big financial houses to tie up their own capital holding commercial paper they had already written for previous M&A's. All of the big financial houses have already booked subprime losses and have far more future losses implied ... variation from one house to another is only a matter of degree. One financial house is downgrading the stock of another investment house. What sort of 'good news' did I miss in this regard, other than the US Fed pumping in a few hundred billion worth of freshly printed dollars to (unsuccessfully) save their a$$es ?

    Actually there's a lot of very scary stuff that I don't post ...





    (snip)"This is total fear territory. It's hard to see how ACA could raise capital with a share price under $1.50. A Barron's article:

    ACA has long been a convenient dumping ground in which major subprime securitizers like Bear Stearns (BSC), Citigroup (C), Merrill Lynch (MER) and some 25 other prominent dealers could pitch billions of dollars of risky obligations for modest premiums. That let them gussy up their balance sheets and shift any potential mark-to-market hits to ACA.

    If ACA Capital were to founder, more than $69 billion worth of CDOs, including the $25 billion in subprime paper, would come rumbling back to the Wall Street banks, and likely with heavy attendant losses.

    That's why Wall Street has continued to do a brisk business with the beleaguered firm. In the third quarter, ACA insured some $7 billion of subprime collateralized-debt obligations. Even if the company survives for only another couple of quarters, that would stave off the recognition of billions of dollars of losses.


    ACA's GAAP loss in the third quarter was something like $29.00 a share."(snip)
    Last edited by Melonie; 11-21-2007 at 05:30 PM.

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    Featured Member Vamp's Avatar
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    Default Re: I just found out my credit union

    Regular Savings accounts at financial institutions never have high interest rates. Depending how what you need the money for and how much you could also look at High Yield money market accounts and CDs.

    If it is a emergancy fund then I would suggest going with a High Yield money market account at the local credit union. The interest rate will be a little bit higher but you will have access to part of your savings if anything should come up.

    You can also get 3 month CDs or longer. The interest rate on CDs are generally higher at a credit union than anywhere else. If worse came to worse you could still pull out the money with a small penality. I would ask them about how much and how the penalty works.
    Nature knows no indecencies; man invents them. ~ Mark Twain


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    Banned Melonie's Avatar
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    Default Re: I just found out my credit union

    ^^^ except when the financial institution is in deep s#!t in regard to subprime losses depleting their cash reserves ... prompting them to promise 'the moon' in hopes that you'll let them use YOUR cash to cover their collateral requirements ... I give you the 4.7% E-Trade savings account !!!

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    Default Re: I just found out my credit union

    Melonie - wasnt ING offering nice savings rates before the subprime went into the crapper...???

    And isnt it a problem when banks engage in overly risky business practices esp when u consider that taxpayers guarantee up to 100K of that account balance - ( im thinking of the similar? S&L crisis in the late 80s )

    And Mel - may I say that while i will prolly never agree w/ u on anything political, u are one smart lady!!!

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    Default Re: I just found out my credit union

    IN regard to ING, for a while they were really trying to make a name for themselves in the online banking segment by offering super attractive interest rates ... but lately they have cut their interest rate offerings back a bit. As to ING's involvement with subprime losses, extremely few people know what their exposure really is (including their stockholders, probably !) ... but that's no different than any other major player in investment banking these days.

    As to the FDIC / NCUA insurance, in theory if the depositor's balance is under $100k then the US taxpayer officially has your back. However, in reality, the reserve funds available to the FDIC / NCUA are extremely meager compared to their total insurance liabilities. Thus all is great providing that only a tiny fraction of insured accounts wind up in distress at any given time ... and also provided that any bankrupt banks or credit unions can be quickly sold to larger healthier banks or credit unions so that the FDIC / NCUA liabilities can effectively be 'rolled over' rather than paid off.

    However, if anything should ever precipitate a wave of bank failures ... i.e. a scenario when a big default by one institution could start cascading to other institutions on the opposite side of their CDO's ... then it's entirely possible that the FDIC could be faced with a demand for insurance payouts that would quickly and deeply exceed its existing reserves. If that were to happen, then the FDIC would have to go directly to the US taxpayer to raise additional money for insurance payouts and/or increase FDIC fees on still healthy banks to raise additional money. In that sort of scenario it could literally take years before depositors would see actual cash from their FDIC insured accounts. If you check the fine print of FDIC coverage, there is no time limit requirement for payouts, nor is there a requirement that the FDIC pay interest from the moment the FDIC insured account's parent bank goes bankrupt until the time the FDIC actually cuts a check to the insured depositor.

    Thus if any 1930's style bank failure scenario should ever start building momentum, somebody with $10,000 in an FDIC insured account at a failed bank could wind up waiting 5-7 years to receive an FDIC check for their $10,000. This is certainly better than losing the $10,000, but it could mean that 100% of the FDIC insured $10,000 balance would remain frozen for say 5-7 years, and that the depositor could lose out on 5-7 years worth of interest earnings.

    The reason this is possible of course is the magnitude of dollars that the FDIC insures. Even if you use a low estimate of say 150 million insured bank accounts with an average balance of $10,000 = $1.5 trillion dollars, this is a couple of orders of magnitude larger than the amounts involved during the Savings and Loan crisis, and on the same order of magnitude as the entire US annual federal budget. Thus if a rash of bank failures were to build momentum, such that the FDIC had to go to the US taxpayer for funding, it's very clear that any realistic percentage in special tax increases would still take 5-7 years to produce this magnitude of additional tax revenues.

    An equal worry of course is US taxpayer liabilities in regard to Fannie Mae, Freddie Mac etc. - which far exceed the FDIC / NCUA obligations in terms of absolute dollars. But that's a whole 'nuther story ! Look at the bright side ... if everything goes to hell in a handbasket Ben Bernakke could simply print up 6 trillion brand new dollars to pay off all of these obligations immediately. Of course, this would translate into oil quickly costing $200 per barrel, gasoline at $10 a gallon, $5 for a loaf of bread, and gold at $3000 an ounce ... in other words the $10,000 FDIC payout would buy about $4000 worth of 'real goods' by today's measure !


    PS thanks for the kind words
    Last edited by Melonie; 11-22-2007 at 02:03 AM.

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    Featured Member Vamp's Avatar
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    Default Re: I just found out my credit union

    Quote Originally Posted by Melonie View Post
    ^^^ except when the financial institution is in deep s#!t in regard to subprime losses depleting their cash reserves ... prompting them to promise 'the moon' in hopes that you'll let them use YOUR cash to cover their collateral requirements ... I give you the 4.7% E-Trade savings account !!!

    https://us.etrade.com/e/t/jumppage/v...654DCA000DA7CF

    Not all financial institutions deal with subprime mortgages. The bank i currently work for does not, nor have they invested with CDOs. Most credit unions do not either.
    Nature knows no indecencies; man invents them. ~ Mark Twain


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    Default Re: I just found out my credit union

    ^^^ on this point I have to agree with Xan. By definition, the vast majority of credit unions and local banks have a relatively small service territory. Thus the ability of credit union loan / mortgage customers to continue making payments on their loans / mortgages is highly dependent on the health of the particular local economy. That particular local economy may be heavily dependent on the health of one particular industry (i.e. I wouldn't want to be a credit union member in Detroit right now !). Also, local credit union / local bank customers are all simultaneously affected by any changes in state income / sales tax rates, local property tax rates etc. (and those tax rates won't be falling). Another aspect is that the collateral valuation of mortgages held by local credit unions / local banks is dependent on the health of one particular real estate market (and even if these mortgages have been resold into the secondary market there may still be requirements for collateral adjustment).

    The point is that local credit unions / local banks do not have the 'diversity' of national / international banks, such that if a couple of local economic factors turn sour at the same time the negative impact on those local credit unions / banks will be amplified. In other words, if some major local employer should go belly up, it's possible that 50% of a local credit union / local bank's customers could lose their jobs simultaneously thus instantly rendering 50% of the mortgages as 'subprime'

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    Featured Member Vamp's Avatar
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    Default Re: I just found out my credit union

    I am a credit union member in Detroit! I love the credit union I worked for and I never moved my accounts. It has opened alot of new branches in the past year. It is also a credit union that was connected to GM. It has been had a community charter for fifty years though. The majority of their members are not GM employees. I have complete faith in the safety of my money. They do not deal in subprime mortgages and they have not invested in CDOs either. Credit unions by their nature can not take on much risk. They are very fiscally conservative.

    The hardest hit by the subprime problem is the large national chains. They took on more and more risk. They thought they were so big they could gamble and still win.

    Bottom line not all financial institutions are the same. The only way anyone really knows is to do the research.

    This thread was started so that she could find a place to put her money. Not for doom and gloom about FDIC and NCUA and every other financial institution.
    Nature knows no indecencies; man invents them. ~ Mark Twain


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    Default Re: I just found out my credit union

    ^^^ actually, this thread began by Fawn 'complaining' that her safe stable local credit union savings account was only paying her 1% interest ... and asking where she could find a savings account paying up to 6% interest instead. While 6% is unachievable at the moment, several posters including myself pointed out institutions that are currently paying close to 5% interest. I also pointed out that putting one's money into an institution that is paying 'leading edge' high interest rates inherently involves some element of higher risk !

    As to your personal opinions about the Detroit credit union that you worked for, all I can say is let's revisit those opinions a year from now.

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    Default Re: I just found out my credit union

    so bottom line, which are the best places for high interest savings? I'm looking to open one in the next couple of months.

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    Banned Katrine's Avatar
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    Default Re: I just found out my credit union

    In Costa Rica, offshore banks are paying 28% right now for high-balance accounts.

    "Have you ever been to American wedding? Where is the vodka, where's marinated herring?" - GB
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    Quote Originally Posted by Mia M
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    Default Re: I just found out my credit union

    ^^^ But they are not insured and would have a much higher risk, right?


    ---EDIT---

    Oh Crap --- I didnt see the wink, sorry

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    Default Re: I just found out my credit union

    ^^^ that comes back to my basic question of how good is the FDIC / NCUA insurance on US accounts in a financial crisis scenario ? Costa Rican accounts provide high risk versus high return. With FDIC / NCUA insured US accounts you are getting low return for sure but is your risk really nonexistant ? Nobody will know the answer to that question until it's too late to do anything about it.

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    Banned Katrine's Avatar
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    Default Re: I just found out my credit union

    I would take on the risk in the Costa Rican accounts only if I had my nest egg secure in my traditional cash, fixed, and equity investments here. I still have faith in this system. Don't ask me why, I'm skeptical about everything else in life.

    But if you go to CR, incorporate, and have $500K you want to throw into a beachside bar. Assuming that's fun money and not your life savings, it might be worth a chance?

    "Have you ever been to American wedding? Where is the vodka, where's marinated herring?" - GB
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    Quote Originally Posted by Mia M
    If a cupcake was tossed at me... well, I'd only be upset if it missed my mouth

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    Default Re: I just found out my credit union

    IMHO where Costa Rica is concerned, I would fear the financial risk far less than the political risk. That's why I'm leaning more towards the Caribbean or Malta. One thing is for certain ... I do NOT want to have 100% of my assets at the mercy of the US banking system (even if it is only for the reverse transfer of offshore assets).

  24. #24
    PhillyDancer1982
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    Default Re: I just found out my credit union

    Quote Originally Posted by Zabrina View Post
    ING orange savings account is 4.2% right now with no minimum balance. It's all online so no fussing with snotty bank people.
    I agree with Zabrina here. ING is a pretty high interest account, and -- unlike Certificates of Deposit -- you're not required to lock in your money for a set period of time. Citibank and other banks offer online savings accounts that work similarly to ING and possibly offer slightly higher interest rates.

    Furthermore, a lot of these online savings accounts offer $25-75 to you just for opening the account. But make sure you read the fine print...many of them require a deposit of $100 within the first month or so in order to receive the $25-75 incentive.

    Good luck with finding a new savings account I agree, 1% is pretty cheap/stingy and you should find a better account.

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