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Fox Business: Old School Credit Unions Are Rewarding Savers
Monday, July 11, 2016 6:40 AM

An article on Fox Business reports that many credit unions now rank among the highest-yielding deposit accounts.

“When you join a credit union, you become a member or an owner of the credit union and because you are an owner, what that means is the deposits are funneled back to you, not to the shareholders,” Mike Schenk, head of economics and statistics at the Credit Union National Association told Fox Business. "More often than not, you are likely to find higher yields on your savings accounts and lower loan rates."

Credit unions are now among the top-yielding savings accounts (deposits of $1,000+ as of June 27, 2016). Here's a look at some of the credit unions offering the highest yields on rewards savings and checking accounts (as of June 27, 2016):

Top-Yielding Credit Union Savings Accounts

  • Pioneer Mutual Federal Credit Union | APY: 2.27 percent 
  • Hanover Community Bank | APY: 2.02 percent 
  • Rogue Credit Union | APY: 2.00 percent

Source: DepositAccounts 

 Top-Yielding Credit Union Checking Accounts

  • Infinity FCU | APY: 5.12 percent 
  • Beacon Credit Union | APY: 5.05 percent
  • Honor Credit Union | APY: 5.00 percent 
  • National Average | APY: 1.67 percent

Source: DepositAccounts

Schenk told Fox Business that if history is any guide, consumers can expect to see even higher yields on credit union deposits as the Federal Reserve starts to raise interest rates.

In the first quarter of this year, the average interest rate on a savings account at a credit union was .21 percent and .09 percent at a bank according to Informa Research Services. Back in 2007, when the Federal Reserve’s benchmark rate was at 5 percent, the average interest rate on a savings account at a credit union climbed to .94 percent. Yields for savings accounts at credit unions were also .21 percent higher compared to banks. Schenk expects as interest rates climb back up, rates on deposit accounts at credit unions will likely follow a similar pattern as in the past.

Schenk says credit unions also vary greatly when it comes to interest rates and membership policies, so it is important for consumers to do their research. He recommends calling a credit union directly to ask about membership requirements, interest rates, location, and ATM access.