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Alliant Credit Union's Free High Rate Checking Account & Updates on its Savings Account, HSA and CDs

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Alliant Credit Union
Alliant Credit Union has started a new checking account called Free High Rate Checking. For January it's paying 3.00% APY on all balances if you meet two requirements: opt out of paper statements and have at least one monthly recurring electronic deposit (direct, ATM, transfers from another financial institution). A reader had mentioned receiving a letter on this new account from Alliant a couple of days ago. Details of the new account are now listed on Alliant's website.

Unlike a reward checking account, there is no debit card usage requirements. If you already have an Alliant's free checking account, Alliant will automatically upgrade you to this high rate account if you are meeting these requirements. The rate is subject to change monthly, but based on the savings account history, I would expect this to stay competitive. Some features of the checking account include:
  • no monthly service fees
  • no minimum balance requirements
  • free online bill pay
  • first box of checks are free
  • first 8 ATM transactions free at non-Alliant owned ATMs

Other Deposit Products

Alliant Credit Union still has a competitive savings account with a rate that's 3.25% APY for January. Minimum balance to earn this APY is $100. For more details on the savings account and Alliant's ACH transfer service, please refer to my Alliant Credit Union review.

The CD rates for terms of 12 to 60 months also remain competitive. The Jumbo certificates only require a minimum $25,000. As of 1/06/09 the rates include a 3.65% APY 12-month CD, a 4.25% APY 36-month CD and a 4.50% APY 48-month CD. Refer to the credit union's rate table for all of the rates. The savings account and CDs with the rates above are also available in a Traditional, Roth, SEP IRA, and Coverdell ESA.

Another one of Alliant's exceptional products is their The Health Savings Account. The APY is 4.00% as of 1/06/09. The yield had been 5.25% for most of last year. The HSA has no fees for account opening, maintenance or transactions, and it has no minimum balance requirements.

Membership

Credit union membership is open to local and national PTA members. There's a $25 membership fee for the National PTA, and it's open to all. You can find your local PTA here. Membership in your local PTA may be a lower cost option. Please see the credit union's members eligibility page for more details.

One downside regarding membership is that several readers have reported a hard credit inquiry by Equifax in the application.

Credit Union Overview

Alliant's customer service has impressed many readers. Reports indicate they answer their phones promptly and provide helpful information. They have 24/7 live phone assistance.

Branches are located in Chicago, Des Plaines, and Elk Grove Township, Illinois. There are also branches in Colorado, California and Virginia.

Alliant Credit Union has some fair to strong ratings for soundness: 5 stars (superior) at BauerFinancial and 3 stars (performing) at Bankrate.com. Both are based on 9/30/08 data. The credit union is federally insured by the NCUA (Charter # 67955).

Falling Rates

Rates have fallen at Alliant Credit Union just like for all other banks and credit unions. Alliant's CEO had a good explanation of this in the December newsletter:
Market interest rates have dropped significantly over the past 15 months, which means the rates available to the Alliant Credit Union at the corporate level for "conservative" re-investment purposes have also come down. The Fed Funds rate, the short-term benchmark, has declined from 5.25% in August, 2007, to between 0 and .25% recently. Over the same time period, Alliant's savings dividend declined from 4.85% to 3.50%.

Another nice thing about Alliant is that their rates have been steady without bait and switch games that we've seen at many banks. Here's how the CEO described these:
beware of "new money" offers; at maturity, the institution almost certainly will try to rollover the Certificate at a substantially lower rate in order to earn back the premium they initially paid. At Alliant, we consistently pay high rates and don't play bait and switch.

Thanks to the reader who mentioned this new high rate checking account in the finding-the-best-deals post.
  Tags: California, checking account, savings account, Illinois, Virginia, Colorado, CD rates, IRA rates, Alliant Credit Union

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Comments
11 comments.
Comment #1 by Anonymous posted on
Anonymous
Note that the 8 free monthly ATM transactions must be at ATM's that are in specified networks -- but there are plenty of them nationally.

And speaking of the CD's I recently opened an IRA CD at 3.65 APY (as of today -- 1/5 -- that rate still applies for CD's of $25k+ for a term of 12-23 months). Even knowing how fair Alliant is, I was amazed that their CD's do NOT have automatic renewal. In the application you choose one of three maturity options: transfer to Savings (or in my case IRA Savings); auto-Renew; or send check.

These are good people. Phone CS is 24/7, quickly get a real person, with zero-to-minimal wait. They do give misinformation sometimes, but far less than most institutions' CS.

The checking has options allowing deposit-online-then-mail; and deposit-online by-scanning (no need to mail the check). Even with these methods, deposits begin accruing interest immediately.

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Comment #2 by Anonymous posted on
Anonymous
Oops, I should've said "as of today -- 1/6."

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Comment #3 by Bozo (anonymous) posted on
Bozo
To: All
Re: Alliant

I would simply offer my comments regarding this new deal and my experiences with Alliant in general.

I joined Alliant about a year ago, primarily to take advantage of the 2-year 5.4% CD (boy, howdy, was that a good idea). I also opened a savings account and got the free "no gimmicks" checking. When I opened the account (in person, in San Mateo (CA)), the branch manager spent about an hour walking me through how to use the savings account, transfer in and out on-line, you name it. Customer service writ large. I opened another CD in April for my wife (she also joined). While the savings account interest rate has fallen, it is still (in effect) an interest-bearing checking account at 3.25%, since you can move money instantly from savings to checking, as you need to.

So, since I already have free checking and a savings account at 3.25%, the "new" deal at 3% is not attractive. As noted above, you can move money from savings to checking on-line instantly, and it earns 3.25% until you do so. I guess the "new" deal might help folks who have trouble budgeting or plan to write a lot of checks on the checking account, though.

Anyway, joining Alliant is super-easy (think local PTA membership) and the service (on the phone, on-line, and in person) is great.

Oh, one other thing I recall is that interest on CDs now appears to have a monthly-payment option. With my current CDs, I couldn't get the interest paid until maturity, which is a bit of a pain if you're retired.

Good luck to all.

Bozo

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Comment #4 by Banking Guy (anonymous) posted on
Banking Guy
Bozo, Thanks for sharing your experience at Alliant. Those 5.4% apy CDs sure seem nice today.

1
Comment #5 by Bozo (anonymous) posted on
Bozo
To: Banking Guy
Re: Alliant

My friend, if it weren't for you and your blog, I never would have known of Alliant. But, then, you knew that. Right?

I've spread the gospel of your blog as much as possible. Folks at the Bogleheads blog now regularly link to you. I hope I had some small part in that.

Bozo

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Comment #6 by Anonymous posted on
Anonymous
Agree with everything Bozo said, except that there *is* a benefit to the 3.00% APY checking despite the fact that instant transfers from Savings have always been available. Namely, if you write a paper check (especially for a large amount) and immediately transfer funds from Savings to cover it, these funds will earn nearly Savings-level interest instead of sitting there with zero-to-minimal interest during the time it takes for the check to clear. So if you ever use Alliant's Free Checking for anything other than Online BillPay (which is float-less), it is in fact worth making those two almost-trivial changes required to convert automatically to the 3.00% checking (and I'd wager that most customers already meet one or both of those requirements).

1
Comment #7 by Anonymous posted on
Anonymous
Another reason to use checking account is if you have to make more than 6 withdrawals. You can transfer funds to supplemental savings and earn 3.25% with 6 more withdrawals.

1
Comment #8 by mylene (anonymous) posted on
mylene
Checked website on Friday 1/16 a.m. It looks like they expired.

1
Comment #9 by Recovering Intellectual (anonymous) posted on
Recovering Intellectual
Can anyone explain why BankRate and BauerFinancial offer such different ratings (3 stars vs. 5 stars)?

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Comment #10 by Anonymous posted on
Anonymous
Hello everyone,

I'm new to this blog. But I just wanted to say that I jointed up with Alliant almost 9 years ago now. I love it. I have had experiences at banks. I'll never go back.

The outlook of the credit union simply tells me that they aren't in it just for the money. They truely want to help folks out. And that is just something that seems rare to me.

1
Comment #11 by AnonymousCustomer (anonymous) posted on
AnonymousCustomer
Their rates and customer service are very attractive. However, I wouldn't recommend using online banking with them. Their language is not clear about who bears the liability in case of unauthorized transactions (e.g., if their security is compromised or if unauthorized transactions occur on your account).

If you read their Account Agreement, it is very vague on this point. The "Member Liability" section seems to have been written in an age when fraud occurred due to lost or stolen ATM cards, and seems ambiguous about security threats due to online banking.

I called and spoke with a customer service representative, who wasn't very clear on the point. He tried to answer my question but it was pretty clear he was making it up on the spot. The bottom line is that it seems possible that, if there is a security compromise, you could lose all the money in your account; if that does happen, Alliant does not promise to make you good, even if it happens for no fault of your own.

In comparison, some other banks have better language that is more protective of their customers. For instance, Bank of America's language is very clear that Bank of America will make you whole for any unauthorized transactions that may occur, e.g., in the event of a security compromise.

I wouldn't recommend using online banking with Alliant until they clarify their language on this point.

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