CU interest rates, fees still beat banks: WalletHub study
April 9, 2015
WASHINGTON (4/10/15)--Credit unions "continue to offer market-leading interest rates among branch-based institutions, providing more than two times the value of regional banks and over five times as much as national banks," according to WalletHub's 2015 Banking Landscape Report.
WalletHub analyzed rates, fees and features of more than 2,000 checking and savings accounts, money market accounts and certificates of deposit of credit unions and banks. It found that, despite the Federal Reserve's wind-down of its quantitative easing bond-buying program, rates for checking accounts dropped by one basis point in first quarter of 2015 to 0.23% from 0.24%. Savings account rates were unchanged at 0.14%.
Credit unions had the lowest monthly checking account fees--$1.93 compared with $15.64 at national banks, $10.29 at regional banks, $6.92 at small banks and $5.92 at community banks. Credit unions also had the lowest non-bank ATM fee ($1.06), the lowest paper-statement fee (15 cents), the lowest overdraft fee ($27), and the lowest insufficient funds fee ($27).
They also bested other institutions on an index, created by WalletHub, of consumer-friendly features of checking accounts scoring 44.1% overall, compared with the second best, small banks at 27.9%.
Contrary to popular belief, checking accounts at brick-and-mortar institutions, at an average interest rate of .23%, are paying nine basis points more than branch-based savings accounts, which have .14% interest rates;
Business checking accounts tend to be more expensive than personal online checking accounts, providing lower interest rates and fewer features;
The average nonbank ATM fee fell nearly 5% during first quarter and more than 10% from a year ago;
Checking account rewards are returning; 11.4% offer rewards, compared with 8.6% last year; and,
Certificates of deposit "aren't worth it in the current market." A two-year CD offers a lower interest rate than an online savings account.