Can the Credit Union Handle Me?
Linda changed from a bank to a credit union for a better interest rate. Linda is worried that a credit union isn't insured though. Dave says they are and alleviates Linda's fears.
QUESTION: Linda in New York City changed from a bank to a credit union for a better interest rate. Linda is worried that a credit union isn’t insured though. Dave says they are and alleviates Linda’s fears.
ANSWER: They are insured by the NCUA. The money is absolutely as okay in a credit union as it would be in a bank. I’m not going to put my money in a bank that I think is weak or a credit union that I think is weak. The only thing I deal with is credit unions and small, community, local and regional banks. The bank I do business with is statewide, but it’s not one of the megabanks, because I’m just not going to deal with that junk.
The credit unions do traditionally have lower fees and traditionally have a little bit higher interest rate. If you have $25,000 in there, you are definitely within their insurance limits. The NCUA, the National Credit Union Association is the insuring body for all the credit unions. I’m a big proponent of credit unions, so I think you did the right thing. I don’t think it is too good to be true.
Now some credit unions are a little one-person operation or something, and that’s not what I’m talking about. I’m talking about a full-blown, professionally run credit union that has services and availability that are comparable to your community bank. In that case, I’m very bullish on credit unions.