The main credit unions in Colorado have left behind the days where marketing meant sitting there, serving your customers well, have lower fees, and higher interest, and waiting for the smart, financially savvy people to find you on their own. Well, that, and collecting new employees at the companies they started out servicing. Today’s credit unions are willing to put some effort into finding new members and making sure you find them.
Westerra Credit Union 90th Anniversary CD
Westerra has been around since 1934, which is bonkers. I didn’t even think they had credit unions by then. Be that as it may, the company is making a splash with an outlandish 5-month 9.0% APY CD.
Of course, 9% comes with some fine print. In this case, the CD has a maximum deposit of $3,000 and those funds have to be new money to the credit union. Still, 9% on $3,000 is a lot better than 2.5% on $3,000 in some savings account, or even 4.5% in an online high-yield savings account. And you get local, physical locations to go with it just in case you ever need to talk to someone in person, get a cashier’s check, or even get something notarized.
High Interest Rate Hook
Of course, the point of the highest interest rate CD in Colorado (I didn’t look, but probably) isn’t to shell out cash. The credit union hopes that by opening a new account to earn 9.0% on that CD, you’ll look around and maybe notice something else you like. They have a more normal 4.50% 13-month CD without the $3,000 cap.
You can also get interest on your checking — if you direct deposit and use your debit card — and they have a Money Market Select account which is just a money market account, but you get 4.0% if you have 10 card swipes each month. Obviously, a little carriage fees and even credit card interest can offset some generous deposit accounts.
Other local credit unions do similar things. The smaller Red Rocks Credit Union will give you 10% interest via their “Reverse Tier Savings Account.” Unlike your typical account where depositing more money qualifies you for higher tiers and higher interest rates, the Reverse Tier Savings Account starts with its highest rate at the bottom. So, from $0 to $2,000 you earn 10%. After that you move to the next tier where $2,001 to $5,000 earns 3.5%.
You get the idea.
For credit unions new members are all about new opportunities to draw in a few more deposits, which they can match against more loans, and the circle of life continues, all without having to skim off the top to generate a profit for those pesky shareholders.
Get Some Credit Union Loans
Like bigger banks, credit unions make their bread and butter on loans. Unlike bigger banks, credit unions have to pretty much stick with matching loans to deposits, so attracting new members is critical to being able to provide members attractive loan rates whose interest keeps the lights on, and the promotional ideas spinning.
Westerra will happily provide you with a debit card. A little income with every swipe, plus members like depositing money when they know they can get it back quickly if they want. I’m sure they really love to hand you credit cards as well. Not only do you get some of those sweet swipe fees but collecting credit card interest is where the big money is. The best part is, that unlike say auto loans or home equity lines of credit, people — even savvy credit union members — understand that credit cards come with higher interest rates. Bigger earnings, with no ill will.
Win/Win!