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Columnist Start with a CU for good rate yields
NEW YORK (5/21/08)--Credit unions, cyber banks and big-box financial institutions are upping the yields on short- and long-term certificates of deposit (CDs) to lure in depositors looking for a safe place to park $1,000, says a columnist in Monday's issue of TheStreet.com. Farnoosh Torabi, writing about the safety of CDs in uncertain economic times, recommends credit unions as one of the starting points for consumers with an extra $1,000 searching for secure deposit instruments to park their savings. "Credit unions tend to offer higher yields, since they do little marketing and don't depend on huge spreads to please shareholders," says the article. Experts say credit unions have a history of better savings rates than traditional banks, Torabi writes. Daniel Penrod, industry analyst for the California Credit Union League, explains in the article that conservatively, credit unions offer half to three quarters of a point more on CD yields than banks. He points out that the biggest myth about credit unions: that few people qualify to join unless they have a certain job, ethnicity or location. Most of the population is eligible to join a credit union, he says, adding that with shared branching and the nationwide credit union CO-OP Network, credit union members actually have 25,000 branches to use. To access the original article, use the link.
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