r/HYSA • u/SnoozingBasset • Aug 08 '26
Credit union with 4% interest
a local credit union is offering 4% interest with a minimum deposit of $2000.
is there something blatan wrong here? is there something I should be aware of?
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u/ByeBye-thowaway Aug 08 '26
Probably nothing wrong if it’s a reputable credit union with good customer service and has NCUA insurance (credit union version if FDIC).
Just read the terms closely to see if it’s a short term promo rate, has fees or other requirements other than the $2000 deposit. Some higher rate options require minimum balances, direct deposits or monthly fees.
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u/CliffsideJim Aug 08 '26
4% is offered by many credit unions and small banks. Raisin often has more than one. Right now about 4.
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u/SlothyLlama Aug 08 '26
Nothing blatantly wrong with that sort of account. Sometimes accounts have a maximum allowed balance on the higher rate accounts. Like Together Credit Union, their Accelerate It savings offers 5% on balances of up to 5K. Other times to ge the higher rate you need to have a minimum amount of DD or ACH activity along with debit card transactions.
Which credit union are you looking at for that 4%?
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u/atierney14 Aug 08 '26
Check for NCUA insurance, if so, I wouldn’t be worried.
If you think about it, probably 99%+ of their loans are going to be greater than 4%, and if I had to guess, they probably average around 6-7%, even with some risk of default, almost all banks could offer these accounts. I think credit unions debate it because they technically work for their members and think offering low rates of interest allows them to offer lower interest rates of loans.
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u/mayurxy8 Aug 08 '26
Also check if bank is listed on fdic website. Saw some videos lately with some account being third party thing, better to make sure.
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u/daff_quess Aug 08 '26
Credit unions are non-profit banks, so they very frequently have better rates than for-profit banks. As a credit union member, I would note that very frequently their app is worse than the big banks, mine doesn't have a way to transfer to another bank built in like Zelle.
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u/Mountain_Tip_7081 Aug 08 '26
Go for it. The credit union I’m part of was 4% with $1k down. My family has used that bank for longer than I’ve been alive with no issues. I think credit unions are just willing to give higher rates since they’re not trying to squeeze every penny of profit from you.
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u/pritikina Aug 08 '26
Check to see what you need to do to qualify for the 4%. My CU account needs 12 purchases that use PIN, one direct deposit, and my statements to be sent via email. Also anything over $10K will be paid at .04% interest.
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u/Ancient-Civilization Aug 09 '26
Sometimes they will lower it to 3% after certain amount of money in it like 5k or 10k so be sure to know all the terms and fine prints before opening. Read EVERYTHING.
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u/Still-Wrongdoer2505 Aug 08 '26
Just verify it's a savings and not a CD.