I have been a member of my work credit union for 2 decades. Why? It predates direct deposit, and i could have the money taken out of my paycheck ahead of my bank. It was a good way to get money saved. I still use it, but I don’t have a lot taken out, I use it as a holding place for my car insurance that I pay quarterly. The interest rate rather sucks.

But historically, credit unions have not really been about saving. They are member-driven vehicles for LENDING. Just as there used to be a difference between “savings and loan” and a “bank,” there used to be a difference between credit unions (note the words “credit” and “union?”) and a “bank.” I’m not sure that difference is there now, since you apparently don’t have to be a member of anything to get an account at a CU. Maybe that’s a bad thing, because, as the interviewer noted, people who are in a CU don’t think they are members of anything, they just think they are clients like everywhere else.

CUs can still offer stuff that banks can’t, but that stuff is getting narrower. (we bought a time share years ago with a CU “secured loan” at like 1% interest) Just as you don’t have a CU account because the work of changing doesn’t justify the benefit, I haven’t fired my CU because the benefit doesn’t justify the change. (finding another easy way of saving for that car insurance)

Keep it up! I’m loving your advice as usual!

I too am a fan of IngDirect but not of the cap gains taxes at year end. How do you feel about the cap gains taxes that you will see from using a high yield interest acct – which are at least a % or two less than they have been in recent years – versus money mkt or other vehicles?

Caleb
http://www.mefinanciallyfree.blogspot.com