Advertisement
If you have a new account but are having problems posting or verifying your account, please email us on hello@boards.ie for help. Thanks :)
Hello all! Please ensure that you are posting a new thread or question in the appropriate forum. The Feedback forum is overwhelmed with questions that are having to be moved elsewhere. If you need help to verify your account contact hello@boards.ie
Hi there,
There is an issue with role permissions that is being worked on at the moment.
If you are having trouble with access or permissions on regional forums please post here to get access: https://www.boards.ie/discussion/2058365403/you-do-not-have-permission-for-that#latest

Credit Union Interest rates

  • 13-04-2015 6:16pm
    #1
    hfallada
    Closed Accounts Posts: 4,180 ✭✭✭


    In the US, a CU loans on cars are about 1-2.5%. They have credit cards at about 8-9% and offer interest on savings.

    Where as CU here rarely offer interest on savings. Their loans are about 8%. They generally have the most horrific opening hours possible. There is hardly a logic for having loans 4-8 times the interest rates they offer in the US. If a CU in NYC, can offer car loans at 2%, why cant the same happen here?


Comments

  • #2
    L1011
    Registered Users, Registered Users 2 Posts: 71,186 ✭✭✭✭L1011


    CUs are (almost every single one) horribly undercapitalised and as a result cannot compete on loan prices until that is sorted.

    They're also often TINY compared to the US, which is why they're merging left right and centre; and they don't offer a full range of products like credit cards hence they don't have ancillary income sources.


  • #3
    hfallada
    Closed Accounts Posts: 4,180 ✭✭✭hfallada


    Well encouraging people to save with an actual interest rate might help. They basically only advertise for loans, but never encourage saving like banks do. They appear to be making no effort to sort out their lack of savings. Where as Banks in difficult offer higher interest rates to encourage savings.

    If they cant compete, they probably should merge into one large organisations. As they stand, they are being run by fairly incompetent people eg how many CUs have gone under due to 'special loans' to board of director members. Banks are often more competitive than them now. If they merged, they could offers ATMs, proper current accounts, online banking. They can be something other than a place for people with proper credit to get a car loan.


  • #4
    Geuze
    Registered Users, Registered Users 2 Posts: 14,039 ✭✭✭✭Geuze


    CU are flush with deposits, they have too much.

    No need to offer higher savings rates.

    What they need to do is drive lending.

    Indeed, many of them simply put the savings on deposit in the local banks.

    Do most CU members realise that much of their savings are on deposit in the local bank?


  • #5
    L1011
    Registered Users, Registered Users 2 Posts: 71,186 ✭✭✭✭L1011


    Geuze wrote: »
    CU are flush with deposits, they have too much.

    Large numbers of credit unions are considered "undercapitalised" or "badly undercapitalised" by the Central Bank. Most of them are pretty large too.


    Mergers are happening - in Dublin there's now a few merged unions with brand names rather than the traditional area or parish church name - Core, Progressive and Community all come to mind. Nobody seems to have hit ten branches yet but I'd say its likely to happen.


  • #6
    delahuntv
    Closed Accounts Posts: 1,532 ✭✭✭delahuntv


    hfallada wrote: »
    In the US, a CU loans on cars are about 1-2.5%. They have credit cards at about 8-9% and offer interest on savings.

    Where as CU here rarely offer interest on savings. Their loans are about 8%. They generally have the most horrific opening hours possible. There is hardly a logic for having loans 4-8 times the interest rates they offer in the US. If a CU in NYC, can offer car loans at 2%, why cant the same happen here?

    One or two may have special offers, so comparing one or two special offers with a totally different market is just crazy.

    A quick look at 4 CUs that come up on google sees a couple of offers at 2.29%, but main interest on loans at 5%-6%.

    Interest on deposits is similar or worse than here, 0% - 0.6% depending on notice period. Here it is paid by way of dividend at end of the year - currently it is an average of 1%.

    http://www.campuscu.com/rates/#CertificatesofDeposit

    One MASSIVE difference between USA and here is if you miss one single payment, they can (and in many cases do) take the property away immediately.


  • Advertisement
Advertisement