Re moving money out of "too big to fail" banks ... Credit Union rates higher . . .

[defendandprotect]

Our TD bank was paying .008% on I think it was 13 month CD --

Credit union near us -- Advanced Financial Credit Union rates are:

12-23 month -- .0185%

36 month or longer -- .0228%


big difference --



Of course, we all know that if we were trying to borrow $1,000 from the big banks

the total charges would be very high. How Congress lets them get away with underpaying

so glaringly on CDs or Bank accounts should be questioned!!

[defendandprotect]

1. kick

[gratuitous]

2. There was a little story on it on Weekend Edition

Liane Hansen, I think it was, interviewed some financial fellow. They talked specifically about the anemic rates banks are paying savers. As I recall it, the gist was that banks were hurting because of all the bad paper they’d written while Bush administration policies were overheating the economy. Irresponsible lending practices, coupled with overpriced properties meant that there was a lot of “stuff” to get off the balance sheets. But the banks didn’t want to lower loan rates or appraise the properties at their adjusted value, because they’d hemorrhage red ink.

So, in order to keep bank balance sheets propped up and fend off FDIC takeovers, interest rates on savings have to be kept incredibly low, because the banks can’t afford to pay savers, who actually made the right choice of staying out of the investment markets while they were being spun off the rails. And banks need to keep the deposits up to cover their losses from bad loans. The interviewer said it sounded like everyone was getting a break except for the people who had done the right thing. The financial person agreed.

Banks pay heinously low interest on deposits, they don’t lend because of the uncertainty in the real estate markets, and borrowers can’t get better terms because it will make bank balance sheets look bad to adjust loan amounts or interest rates.

[defendandprotect]

3. Congress hasn't done enough about all of this -- Wow!!

I hadn't heard any of this -- but needless to say I'm very aware they haven't

re-regulated capitalism nor the banks and we're headed for more trouble!!

The bank I had my CD's at was TD -- a Canadian bank which wasn't involved in bail out's -

but they're certainly not going to pay anything more than the other large banks.


I think they were at .01% when we first checked on a 13 month CD --
now they've dropped it further to .008% -- !!!


The credit unions are non-profit -- I'd recommend them to everyone --

I hope we can continue to switch some other stuff to them!!


Thanks for the report -- frightening!!!





:)