This week we are traveling to North and South Carolina where Premier Credit Union is offering a nice 24-month (2 year) CD. The CD pays 2.00% APY with a $500 minimum balance.
This week we are traveling to North and South Carolina where Premier Federal Credit Union is offering a nice 24-month (2 year) CD. The CD pays 2.00% APY with a $500 minimum balance. That's pretty good when you consider that the average 5-year CD rate according to BestCashCow is 1.58% APY. The 2.00% beats most 3-year, and 4-year CD rates from other banks and credit unions.
Premier Credit Union is headquartered in Greensboro, NC. Premier has nine branches located across western North and South Carolina. Interested individuals can quality for membership based on several different criteria, including working for or receiving a pension from an eligible company, having an immediate family member who is a member, or living in Kings Mountain, NC or in a defined area in Forest City, NC. Learn more about eligibility.
From a financial standpoint, Premier has a Texas Ratio of 6.65% versus the national credit union average of 10.30%. A lower Texas Ratio is better. The credit union also has a net worth of 15.59% versus the national average of 10.14% (higher is better). All deposits at Premier are insured by the NCUA up to $250,000 per person.
If you don't live near a Premier FCU branch, look for the highest CD rates from banks and credit unions in your local area. BestCashCow also has the Internet's largest database of bank rate information.
Check back next Monday for a new bank deal. Email any deals you know about to ratedeal (at) bestcashcow.com. Feel free to also share them below. If you're a bank and have a great deal not listed on BestCashCow, register for access and add the deal to the site.
Are you banking at an institution that is danger of failing? How do you determine if your bank is in jeapordy and might be closed by the FDIC or another regulator?
Are you banking at an institution that is danger of failing? How do you determine if your bank is in jeapordy and might be closed by the FDIC or another regulator? Most banks today do not fail in the traditional sense, instead they are seized by the FDIC or another bank regulator as their financial ratios deteriorate. At BestCashCow, we list several pieces of financial information for every FDIC insured institution. This includes the Texas Ratio of a bank, its Return on Equity and its Capitalization. To determine whether these can be predictive, we analyzed the Texas Ratios and the Return on Equity of the last ten bank failures. The chart below shows what we found:
As you can see, closed banks had several things in common:
Texas ratios above 150%. A bank is considered to be under stress if its Texas Ratio exceeds 100%. The Texas ratios measures the capital and reserves a bank has to cover bad loans. A Texas Ratio above 100% means that the bank no long has enough to cover potential losses.
Negative Return on Equity. Return on Equity measures the amount of income generated by the bank's equity. A negative return on equity is a sign that the bank is no longer profitable.
Of the last ten bank closures, every bank had a Texas Ratio greater than 150% and a negative Return on Equity.
Just because a bank's financials fit this state, does not necessarily mean it will close, but it is a strong warning sign. Be wary. FDIC insured banks provide some protection from bank failure ($250,000 per individual per bank) but there are other negative repurcussions. These include:
A depositor may lose some or all of the money above FDIC limits if a bank fails.
Any CD or CD IRA which a consumer holds in a failed bank may be reset once the bank’s assets are transferred to another bank or cashed out by the FDIC. For example, a depositor who holds a 5-year CD paying 6% APY from 2007 might find the CD called, resulting in lost interest.
Failing banks may not have the time and money needed to provide top-notch customer service and support. They are fighting for their survival.
The cost of bank failures is ultimately borne by the consumer. Money spent by the FDIC to insure bank deposits comes from a fee levied on all banks. The fee that a bank pays, is passed through to the consumer in the form of higher account fees, bank charges, and interest rates on loans. Ultimately, if the bank failure is big enough or systemic enough, the general public must come up with the funds to bail out the banks, as with the TARP and the S&L bailout in the 1980s.
It's worth it to spend a minute taking a look at your bank and understanding its financial condition.
Even though Bank of America canceled the planned $5 monthly debit fee charge, the public outcry continues and many are pushing a movement called "Bank Transfer Day." However, is switching your bank really the right move for you?
After the news broke that Bank of America and other big banks were planning on charging monthly fees for customers to use their debit cards, a national public outcry ensued. Petitions against the debit card fee were signed by hundreds of thousands of people online, The Guardian reports. BofA did back down from implementing the fee, which is great news for loyal Bank of America customers. Even though many customers are still upset over the bank’s previous intentions, how many of those people will actually switch banks? The result may surprise you. According to a study of BBC Watchdog viewers, people in Briton are more likely to get divorced than switch banks, even when they are highly dissatisfied with their bank’s service.
People in the British study claim they view the process of switching banks to be “a pointless and time consuming exercise,” which clearly expresses exasperation with the banking industry as a whole. While many Americans likely echo those sentiments, others are attempting to rally the masses in order to get people to switch to credit unions with more (perceived) reasonable terms, even going as far as to promote a national “Bank Transfer Day,” The Huffington Post reports. “Bank Transfer Day,” designated as November 5, 2011, encourages everyone to go out and switch their big-bank accounts to a local credit union account. While that may be good advice for some people, that advice won’t benefit everyone.
Here’s why: Just like the same prescription medication and clothing wardrobe won’t work for everyone, the same bank (or type of bank) won’t benefit everyone either. Credit unions are a wonderful type of financial institution, and they (on average) have lower interest rates on loans and higher rates on deposit accounts. But credit unions aren’t a panacea; they aren’t the remedy for all of the banking industry woes and they aren’t the best option for every consumer. Many people (especially those who travel a lot) may be better off with a big-name national bank like Bank of America so that they can be assured no matter where they go in the country, they can find a branch (and an ATM) if needed. Other people may find that a local credit union works great for them, depending upon their banking and lifestyle habits.
People shouldn’t stay with their bank no matter what (especially if they would divorce their bank had it been a spouse), nor should they blindly deposit all of their money in a local credit union just because it’s not a “big bank.” While it is important to be cautious about rising bank fees, it’s also important to consider your individual needs and choose a bank that benefits you best.
