Membership has its benefits
Had it with your bank? It may be time to take a trip down to the local credit union.
Credit unions offer many of the best rates in the country on loans, credit cards and savings products.
Each month, Bankrate.com compares the national average rates from credit unions,
banks and thrifts in five key product areas: new-car loans, one-year CDs, money market accounts,
credit cards and 30-year, fixed-rate mortgages.
In September, on four out of the five (mortgages are the exception), credit unions came out ahead for the consumer.
These averages come from Bankrate's monthly survey of the top 50 credit unions, banks and thrifts in the top U.S. markets.
Choosing a credit union over a bank or thrift can mean some serious savings for consumers. Let's start with new car loans.
Credit unions offer the best deal -- an average rate of 8.23 percent. That's on a $16,000,
48-month loan with 10 percent down. You could save $228.48 over the life of the loan by getting the loan
at a credit union instead of a bank. And the credit union loan will save you $195.84 over the same loan
from the average thrift.
Now let's look at savings products. The 3.98 percent average yield on a one-year CD at a
credit union will beat the yield at a bank by better than 1 percent. Thrifts are more generous with
their one-year CD yields than banks are, but the credit union average is still a better deal --
a full half-percent higher.
The credit union average of 2.50 percent on money market accounts is a hefty 1.15 percent
better than the average for banks, and it's more than a half-percent better than what thrifts
are offering. So chalk up another two points for credit unions.
Next stop: interest rates on variable-rate credit cards. Credit unions are averaging 12.61
percent for a variable-rate credit card. Banks are charging 13.91 percent, and, as is usually the
case with credit cards, thrifts have the highest rate -- 14.50 percent.
Our tally so far: credit unions -- 4, banks and thrifts -- 0.
Our next stop is mortgages. This time credit unions come in second behind thrifts.
Let's say you are seeking a $125,000 loan with 20 percent down. Under those conditions,
a 30-year fixed mortgage will average 6.91 percent at a thrift. That means you'll save
$3,016.80 over the life of the loan if you get your mortgage at a thrift vs. a bank.
A thrift will save you $1,807.20 over a credit union.
Our final tally: credit unions -- 4, thrifts -- 1 and banks -- 0.
