Americans are worried about their banks. Americans are worried about defaulting on the debt. Many Americans don’t have $400 in case of any emergency. That position of fear will cloud your financial judgement, allowing mistakes to happen.
Bankrate published a page detailing the best 1 yr CD rates at credit unions. The minimum deposits range from $25 to $1000. You may ask, what’s the difference between a bank and a credit union?
Banks are for-profit, meaning they are either privately owned or publicly traded, while credit unions are nonprofit institutions. This for-profit vs. not-for-profit divide is the reason for the difference between the products and services each type of institution offers.Forbes
Is your money safer in a bank or credit union? The short answer is yes by one measure.
Overall, credit unions have a much higher percentage of insured deposits than banks. Credit unions also have an insurance system for deposits of up to $250,000. No customer covered by National Credit Union Administration insurance has ever lost money.Motley Fool
If you have been following the news closely for the last month, the banks that failed had high levels of uninsured deposits above the $250,000 insurance limit. If the bank fails, you become an unsecured liability of the bank. You may get less than one dollar for each dollar you put in. Who knows how long it takes to get your money back. That fear of loss motivated some of the fastest digital bank runs in history. The money moved to large banks, money market funds, certificates of deposits, and government bonds.
Not mentioned, many credit unions support projects and owners in local communities. We know that large banks and large oil companies are intricately intertwined. The big banks invest in oil projects, the oil majors make record profits, paying the big banks lots of interest, all to destroy the only planet we live on with climate pollution. Credit unions from many angles make sense. Our previous Model 3 car loan was through a credit union. When we refinance, it will be with a credit union.
Two credit unions stand out from Bankrate’s page.
Bethpage Federal Credit Union – The largest credit union in New York State, there is only a $50 minimum deposit offering 4.75% for a one year CD. If you take out the CD money early, the withdrawal penalty is 6 months of dividends. It takes $5 to open an account.
If you don’t have $400 set aside as an emergency fund, every paycheck, set aside $1. If that’s too much, set aside a quarter, in cash. The amount is not important. The idea is to reward yourself for saving first. Build the habit of saving, and you’ll find more ways to save. When I started working $3 seemed like a lot. And it was. The local pizza place, a rare delicacy.
Alliant Credit Union – I’m partial to Alliant Credit Union. They funded our second set of solar panels. They are offering a 5% CD for one year. There is a $1,000 minimum deposit. Again, there is a $5 one-time payment to become a member. Early withdrawal penalty: Dividends on the number of days the CD is open, up to 90 days.
Keep calm and think wisely.
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