Sunday, October 13, 2013

Credit Unions - A Great Option

Well run credit unions offer an excellent alternative to the mediocre banking system.

Not only are their interest rates better, they typically offer better, more personalised customer service. This is because credit unions are member-owned financial cooperatives, democratically controlled by its members, and operated for the purpose of serving its members.
Members benefit on both ends of the spectrum: on their savings accounts they are offered a competitive interest rate sometimes as high as 7 - 8% while borrowers benefit from a competitive rate, a few percentage points above the savings interest rate as low as 9 - 10%. This compares with 0.2% savings rate and 15% lending rate at the commercial banks. The difference between the savings rate and the lending rate for the commercial banks (14.8%) represents the overhead expenses and profit margins.

If you're tired of poor customer service, exorbitant fees, high interest rates on loans and low interest rates on your savings quickly transfer your funds to a prudent credit union, you'll be glad you did. 

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