The Latest Reason to Give Your Bank the Boot
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Perhaps it was the tasty lollipops. Or perhaps, the attractive vinyl checkbook covers. For whatever reason many years ago, you opened your first checking account. How and why you chose your bank, you can’t recall. But you’ve been stuck with the high fees and low returns ever since. Maybe it’s time to make a change.
Rainy Day Funds that Make it Rain
If you’ve heeded the advice of any competent financial professional, you’ve likely taken steps toward establishing a “rainy day fund.” But if you’re like most Americans, your savings are working for the bank and not for you. Money you don’t plan to touch is money that should be earning interest – and as much as possible. What doesn’t fit that bill? Most traditional savings accounts. What can help? Credit unions.
Credit Union Case Study: PenFed
It turns out you can do a lot of good when you pass profits along to your customers. PenFed is a not-for-profit credit union initially established to serve those serving our country at the Pentagon. Today, PenFed serves customers across the country, even those without connection to the military or defense department.
As a nonprofit, PenFed is able to forgo many of those fees charged by traditional banks. Chief among them: monthly maintenance fees. But zero fees is just the beginning. The institution’s biggest benefit is actually a category marked by more, not less. Their real advantage? Interest. PenFed offers an interest rate 13x[1] the national average. Their simple calculator tells a compelling story: a $25,000 emergency fund kept in a traditional bank account for three years would earn $8. At PenFed, the interest earned would be over 85x when you take into effect compounding! Just like your low-interest-yielding savings account, an account with PenFed is federally insured up to $250,000.