DCU “Earn More” Feature?

KLEXH25 · ‎03-04-2020

Is anyone familiar with DCU's Earn More feature? I came across this while looking through my account, and even after reading the description below, I'm still a little confused. I don't currently earn any interest on my checking account, so I'm wondering if there is any downside to doing this?

Anonymous · ‎03-04-2020

They sweep your account balance out to different FIs. I personally opted not to do it because there is a laundry list of terms and conditions and talk about potential delays of funds and all kinds of stuff.

"Risks of the Program.
1. During the Business Day when your Program Deposits are transferred and being deposited into the Program your funds will be held for a limited amount of time intraday at one Receiving Financial Institution (“Intermediary Receiving Financial Institution”) prior to being allocated and distributed among other Receiving Financial Institutions. While your funds are held intraday at the Intermediary Receiving Financial Institution, to the extend your funds exceed the current SMDIA (defined in Section II(D)(5) below), such funds may be uninsured. Once distributed from the Intermediary Receiving Financial Institution to the Receiving Financial Institutions, the funds will be insured. Stable has adopted procedures and controls to ensure the movement of funds in a timely manner each day and expects that your funds will be sent by the Intermediary Receiving Financial Institution to the other Receiving Financial Institutions by the close of business each day. However, in the event of a failure of wire transfer systems or communication facilities or other causes beyond Stable’s control, resulting in your funds not being sent from the Intermediary Receiving Financial Institution to the other Receiving Financial Institutions in a timely manner and remaining at the Intermediary Receiving Financial Institution, your funds could, to the extent they exceed the current SMDIA, be uninsured until the next Business Day.
2. To the extent that DCU is not able to implement your request to exclude a particular Receiving Financial Institution at which you have existing balances, there is a risk that all or portion of your funds allocated to such Receiving Financial Institution by the Program will not be FDICinsured.
3. In the event of a failure of a Receiving Financial Institution, there may be a time period during which you may not be able to access your money. If you have money at a Receiving Financial Institution outside the Program, this will negatively impact the availability of FDIC insurance for the total amount of your funds held within and outside the Program. If your deposits in a Receiving Financial Institution exceed the then current SMDIA of such financial institution, the excess funds are not covered by the FDIC deposit insurance.
4. Where your funds are held in MMDAs, the return of your funds may be delayed. Receiving Financial Institutions are permitted to, but rarely do, impose a delay of up to seven days on any withdrawal request from an MMDA. See 12 C.F.R. § 204.2(d)(1)."

https://www.dcu.org/content/dam/dcu/global/generic/documents/DCU_Earn_More_Checking_Account_Feature_...

12 pages is a lot of legalese for DCU.

Anonymous · ‎03-04-2020

I actualy read through all 12 pages of terms a couple weeks back, and would second the above assesment: not worth it. While the risks outllined are minimal, barey even any "risk" really, it's all for what? The rate isn't that great and capped at a fairly low amount.

I'd say move any extra cash to a HYSA and pass on this optoional "feature".

KLEXH25 · ‎03-05-2020

Yeah, I did go through all those terms, but I was hoping someone has already gone through it in practice. I first came across it a couple of months ago and passed on it, but figured maybe someone here had tried it. Most of my cash is in HYSA anyway, but I do keep some money in my checking. The 1.51% rate is decent, but that wouldn't translate into a lot of earned interest anyway.

Anonymous · ‎03-05-2020

Yeah I think it would make more sense just to keep the maximum in their Savings account that earns the 6%. At lkeast you know you're tieing up funds for teh rate, as oppesed to having Money tied up in a checking account that may or may not pan out.

kat8mouse30 · ‎03-06-2020

I don't think I would trust that -- too much risk. I just use DCU for the 6.17% savings account anyway. Hopefully they keep that good rate now that the Fed is dropping rates again

iced · ‎03-06-2020

@Anonymous wrote:
Yeah I think it would make more sense just to keep the maximum in their Savings account that earns the 6%. At lkeast you know you're tieing up funds for teh rate, as oppesed to having Money tied up in a checking account that may or may not pan out.

I do both. With DCU, I keep $1,000 in savings, siphon any above that off to a higher-yield savings account at another bank, and use the "earn more" checking.

The EM checking returns nearly nothing on a monthly basis but costs me absolutely nothing in return. ATM withdrawals still work, and the bills I pay directly don't care when in the day they're processed, so if I get an extra couple of bucks each month, great.

It's like the ATM reimbursements - you don't really notice it.

Anonymous · ‎03-10-2020

To me a line of credit is for very short term borrowing, a few days to a week. A good line of credit is connected or accessible from your checking account and can be used online to move money into the checking account to cover a current expense.

The best lines of credit do this automatically. My LoC at BECU credit union serves as an overdraft (without fees) on my checking account, and will draw from the LoC in $100 increments to cover withdrawals. I can write a check, execute an ACH, bill pay, or just an ATM withdrawal or debit card purchase and if there aren't sufficient funds in the account it pulls from the line of credit.

I have savings in brokerage accounts and high interest savings accounts and I can move money to cover the balance, but it can take 2-3 data to move funds from a high interest savings account, or a week to sell a mutual fund and move money to the checking account.

The line of credit means that I don't have to worry as much about the timing. I may pay a day or two of interest at 8.9% (in my case) which is usually pennies, and in exchange for that I can earn dollars letting my money sit in a mutual fund or high interest account elsewhere, until it's needed.

Anonymous · ‎03-10-2020

So slightly off topic, how long do you have to wait to log into DCU after you first set up an account? I opened the primary savings today, and at the end it said i had to wait for the pin to arrive as I would need it to access said account. Yet i got an email right after setup saying I have a secure messege that requires my attention. Can I just click the link and create an online account without waiting for the pin?

Thanks, and sorry for the sidetrack.

KLEXH25 · ‎03-10-2020

@Anonymous wrote:
So slightly off topic, how long do you have to wait to log into DCU after you first set up an account? I opened the primary savings today, and at the end it said i had to wait for the pin to arrive as I would need it to access said account. Yet i got an email right after setup saying I have a secure messege that requires my attention. Can I just click the link and create an online account without waiting for the pin?

Thanks, and sorry for the sidetrack.

It's been a while, but I think I couldn't do anything until I had the pin. It took a few days. You can certainly try....but I think you have to wait.