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What do you think about Credit Unions?

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When I was Googling CD rates in hopes of finding high-interest CDs to balance my rapidly-losing-money stock and mutual funds, I came upon a list of various banks and places with their rates. Most of them were around 3 to 4 percent for any reasonable amount to invest in a CD (sorry, if I had $50,000, I would not put it all into one 10 year CD, even if the interest rate was fixed at 5 percent). Then I saw that this one place was offering a 7 percent rate for new members. 7 percent interest on a CD? Where do I sign up?

After doing a little more research, I found out that the “bank” was actually a credit union. While I had planned to take out my $5000 from my liquid BoA CD that’s getting 4.1 percent interest at the moment and put it into a 7 percent CD, it turns out the only amount I can put into this CD is $1000. No more, no less. Well, getting 7 percent returns on $1000 won’t hurt.

Still, I’m a bit confused about credit unions. I did some further research and they seem like a pretty good deal. The only thing I’m concerned about is that when I signed up, the fine print noted they could charge me $20 in membership fees if they wanted. It wasn’t really clear if this was a one time fee, or a per year fee… or monthly…

Credit unions sound good otherwise. When it comes to obtaining loans and such, since these places are, unlike banks, non profits, they can give relatively low rates. That’s about the extend of my understanding of these credit union places for the time being. I decided to sign up for that $1000 CD (I’ll be dropping a check off at my local branch later this week) so I can learn more. I figure if I ever get around to be able to afford a house (or a teeny tiny condo), it will make sense to be affiliated with this type of financial institution.

Do any of you belong to credit unions? Why or why not?

Investing, Retirement

Too Good to be True?

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I understand that mutual funds are fickle, but I’m still rather excited by the fact that my $3000 has made $31.28 in just two days. It’ll probably drop down again sometime soon, so I’m not sure how much weight to put on that $31.28 cent gain. Still, that’s pretty cool… to think, it’s possible to make an extra $15 a day. That’s enough for lunch!

Meanwhile, my Roth IRA has gone up $18.40. So I’m up $49.68 in two days. That’s not bad, is it? I wonder how long until my accounts are at less than what I started with.

I’m still confused about the CD I tried to open online. It was that $5000 one at 5.01%. BoA called me but I still haven’t gotten back to them. And, as I noted before, I tried to take of the matter with a real person at an actual banking center, but because I bought the CD online I can only ask my questions to online banking reps via the phone. I’m kind of hoping something went wrong with it and it didn’t go through. That way I can take that $5000 and put it into another mutual fund, perhaps a large cap one. Or maybe I’ll be risky (stupid?) and put more in my VMGIX fund.

One thing I don’t get is if mutual funds work like the stock market. For instance, is it best to “buy” when the price is low for each fund share? Or does it matter less because you’re buying pieces of a bunch of stocks as opposed to just one stock?

I wish my bank would process transfers faster. It gets confusing when it looks like my checking account has $14k in it but really I know $6k of that was moved to the IRA & mutual fund and $5k of that is supposedly tied up in a CD that may or may not exist.

Off on a tangent, it’s quite exciting that I’ve gotten so many comments on my blog in the past day. One person who reads my other blogs actually figured out who I am! I don’t really care much if people who know me read this, but I guess I’m partially ashamed of being such a spoiled brat with my cushion of savings in the bank, and I feel awful that I don’t have student loans to pay while plenty of my friends do.

Then again, I also have friends whose parents will gladly put them through grad school and I know that, while my dad would help out here and there, I’m on my own when it comes to any higher education. Or am I? Well, my father says he can access his 401k funds in about 3 and a half years. It seems like he’s hinting at the fact that at that point he’ll be able to help out with money a bit more.

A part of me wants nothing to do with his money right now. I’ve already received more than I desire, and I feel guilty about that. But there’s also reality, and how I’m likely going to be making a “normal” salary for the foreseeable future. My $24k in savings doesn’t seem like much when I figure plenty of my peers are making $50k or $60k per year. Give them two years or less and already we’re on an equal playing field. So how guilty can I let myself feel, really?

Investing

CD Crazy.

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Since I’m risk-adverse and I get all wide-eyed and bushy tailed at the thought of a high-rate CD, I pulled out $5000 from my “Maximizer” checking account and put it into a 4.26% 11-month risk-free CD at the bank. Of course I went to the bank to deposit my paycheck, but how could I say no to an 11-month “risk-free” CD? Well, supposedly I can take out money once a week with no penalties, and all I have to do is go to the bank. I figure the harder it is to get to my money, the less likely I’ll spend it.

I considered pulling my $7,400 from my crappy CD and putting it into the new one, but it turns out that the penalty to take it out (about $100) would be just about as much as the extra cash I’d make if I moved it to the slightly higher-rate CD.

So, gee, now I have three CDs. Is that crazy? The one I signed up for online hasn’t gone through yet. I still need to call the bank. It’s really frustrating that the online version of my bank and the in-person version don’t really talk to each other, with the exception of sharing my account information. I just wanted to sign any documents needed for the CD to be set up, but I can’t do that at the bank. I have to call them and deal with the automated system. Oh what fun.