topic Re: Credit union question in Personal Finance

Credit union question

Anonymous — Thu, 21 Jan 2021 15:31:00 GMT

[OK, I know this doesn't quite belong here, [Mod cut - No. No it doesn't, which is why it was moved to Personal Finance, a subforum created for these very types of questions.]]

I opened an account at a certain CU, and made the needed $10 deposit for a member share account. Checking in, I see that my balance is $0, because there is also a pending $10 withdrawal. When I called to ask, I'm told that this is what they do until the account is closed, basically a hold against the needed $10.

As far as I can see though, this is depriving me of the 0.01%APR on $10, so there goes my retirement plan!

All my other CUs seem to use a "Balance" and Available Balance (which is $5-$25 less), so you can't withdraw below the minimum, but the interest is earned on the whole balance.

Do others agree with this experience.

Re: Credit union question

fatcomic — Thu, 21 Jan 2021 15:35:59 GMT

Yes, most credit unions "hold" the required deposit for the membership from your balance. I'm a member of 4 CU's and they all have a different balance and available balance amount on the savings account that subtracts the minimum required deposit.

As for the interst earned, I've never done the math to see if they were actually paying interst on the required minimum deposit amount, and this could be a situation that varies by credit union. TBH none of my credit unions are paying a significant enough saving interest to get excited about. I believe I read on here some credit union offers a higher limit on the first $1,000 deposited.

Re: Credit union question

Anonymous — Thu, 21 Jan 2021 15:51:23 GMT

@fatcomic wrote:
Yes, most credit unions "hold" the required deposit for the membership from your balance. I'm a member of 4 CU's and they all have a different balance and available balance amount on the savings account that subtracts the minimum required deposit.
As for the interst earned, I've never done the math to see if they were actually paying interst on the required minimum deposit amount, and this could be a situation that varies by credit union. TBH none of my credit unions are paying a significant enough saving interest to get excited about. I believe I read on here some credit union offers a higher limit on the first $1,000 deposited.

Yes, I have noproblem with the "actual" and "available" approach, that is what I am used to in my many CUs. It's seeing a "balance" of 0 that appears wrong. Like you I haven't don't the calculation in other cases, but my strong guess is that interest is paid on the full balance, because that is what is actually on deposit (there is just a restriction on what can be removed). So this seems wrong!

ETA: one of the CUs, PenAir, breaks down the calculation, and are indeed giving interest on the whole balance, not just the available.

Re: Credit union question

iced — Thu, 21 Jan 2021 17:36:41 GMT

@Anonymous wrote:
[OK, I know this doesn't quite belong here, [Mod cut - No. No it doesn't, which is why it was moved to Personal Finance, a subforum created for these very types of questions.]]

I opened an account at a certain CU, and made the needed $10 deposit for a member share account. Checking in, I see that my balance is $0, because there is also a pending $10 withdrawal. When I called to ask, I'm told that this is what they do until the account is closed, basically a hold against the needed $10.

As far as I can see though, this is depriving me of the 0.01%APR on $10, so there goes my retirement plan!

All my other CUs seem to use a "Balance" and Available Balance (which is $5-$25 less), so you can't withdraw below the minimum, but the interest is earned on the whole balance.

Do others agree with this experience.

I'm more miffed about holding periods on deposits with limits over $X, usually $5k, which tend to get treated as you described. I made a $200k deposit into DCU last year and there was a staged holding period whereby some of the funds became available next day, but it took almost a week for the full amount to become "available" to me. Granted, dividend checking caps out at $100k, but there were a couple days where $70k+ of my balance wasn't subject to interest/dividend of 0.5%, which may well have been many tens of cents.

To be fair, we also sent a $450k wire into one of our non-CU accounts and that also took its sweet time to become available (even though it was a wire!), so this isn't unique to CUs.

I think for both of us though, the real answer is these are first-world problems and unlikely to really matter in the long-term. I'm not going to terminate my relationships with these institutions just because they deep-sixed my savings goals for 2020 by withholding 3 days of interest.

Re: Credit union question

Anonymous — Thu, 21 Jan 2021 18:48:18 GMT

@iced wrote:

I think for both of us though, the real answer is these are first-world problems and unlikely to really matter in the long-term. I'm not going to terminate my relationships with these institutions just because they deep-sixed my savings goals for 2020 by withholding 3 days of interest.

Right. But this particular CU turns out not to really offer the rate I had seen (that rate is if you also have checking, mortgage and active duty/first responder!) so there is less incentive to stay. OTOH, a slightly more involved app process so I have sunk time into an unsatisfactory relationship, so why not $10 as well.

Re: Credit union question

Kforce — Thu, 21 Jan 2021 23:48:35 GMT

@Anonymous wrote:

OTOH, a slightly more involved app process so I have sunk time into an unsatisfactory relationship, so why not $10 as well.

Not a bad as USAlliance I hope.

Re: Credit union question

Anonymous — Fri, 22 Jan 2021 05:23:55 GMT

@Anonymous wrote:
@fatcomic wrote:
Yes, most credit unions "hold" the required deposit for the membership from your balance. I'm a member of 4 CU's and they all have a different balance and available balance amount on the savings account that subtracts the minimum required deposit.
As for the interst earned, I've never done the math to see if they were actually paying interst on the required minimum deposit amount, and this could be a situation that varies by credit union. TBH none of my credit unions are paying a significant enough saving interest to get excited about. I believe I read on here some credit union offers a higher limit on the first $1,000 deposited.
Yes, I have noproblem with the "actual" and "available" approach, that is what I am used to in my many CUs. It's seeing a "balance" of 0 that appears wrong. Like you I haven't don't the calculation in other cases, but my strong guess is that interest is paid on the full balance, because that is what is actually on deposit (there is just a restriction on what can be removed). So this seems wrong!

ETA: one of the CUs, PenAir, breaks down the calculation, and are indeed giving interest on the whole balance, not just the available.

Of the handful of CU accounts I have, they all show $0 available, well because $0 is avaialble.

If I click on the account, it shows my $10-$25 in the ledger and, yes, I earn interest on it.

Re: Credit union question

Anonymous — Fri, 22 Jan 2021 20:51:25 GMT

@Anonymous wrote:
Of the handful of CU accounts I have, they all show $0 available, well because $0 is avaialble.

If I click on the account, it shows my $10-$25 in the ledger and, yes, I earn interest on it.

Right, that is I expect. So, bad Financial Resources FCU for using the $0 balance approach!