Comment by midnightmonster | Hacker News Reader

Comment by midnightmonster | Hacker News Reader

midnightmonster

Or go the next logical step and move your money to a credit union, where the dollars in your account are shares in the union. Unlike banks, the average credit union isn't built to screw you in every way they think they can get away with.

Small examples:

* When I first opened my accounts there was a (required by law, afaik) probationary period where checks took ages to clear. Since then, all my checks clear the moment I deposit them through the drive through. Typical checks are in the $1000-$6000 range, out of state. (My parents use the same credit union. My mom thinks she remembers a check deposit taking one business day--once.)

* Transfers from PayPal seem to clear a day faster than they did with my bank.

* Overdraft protection from my savings account is free and automatic.

Being a part of a credit union is a different experience from depositing money at a bank. It's similar to the way you might feel different even about some big, "faceless" corporation if it was one you'd chosen to make a significant (to you, if not them) investment in.

1. The bank took longer to clear the check because it would have to send the check back to the bank where the check was first drawn, this is what we call float.. your credit union probably had a system in place that gives you a temporary "credit" until that check officially clears.. this is all pretty much null and void after 9/11, most banks can just send an image of the check eliminating your float.

2. you're two other points are mute really, you can find banks with similar advantageous pricing structures; the advantages of credit unions are they don't have to pay the outrageous taxes federal banks are paying, this helps keep their lending rates down, the important thing to remember though is a credit union is not an FDIC insured thing, if it goes under you're screwed. the nice thing is, its hard for a community driven thing to go under, but if all the lenders start short selling good luck.

Wikipedia (yeah, not the best source: http://en.wikipedia.org/wiki/Credit_unions_in_the_United_Sta...) claims that all federally chartered and nearly all (95%?) state chartered credit unions are insured to $250k through NCUSIF. Sounds like a pretty safe bet to me. I'm not so sure you're screwed if they go under, although maybe someone can point on an example of that actually occurring?

1. I can't tell if you're saying that most banks now also credit my account instantly (none of the three I've used post-9/11 did), or if you're saying that getting access to my deposits instantly isn't really an advantage because... ?

2. Credit unions are insured by the NCUA, a federal agency backed by the full faith and credit of the US Government just as the FDIC, and in the same amounts with the same rules about accounts.

this will vary with different institutions.. If you deposit money into an account you will have access to it instantly with most banks, unless they don't do in office processing or have some sort of memo credit system in place. I can't think of many that don't. Credit unions aren't available to everyone tho and are still limited in lending as opposed to any fdic bank.

Then why aren't deposits to a credit union more popular?

Probably for the same reason that McDonalds is still does a ton more business than the small local mom and pop burger places. People feel comfortable with the big chain that they know even if it's not as good.

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