Great Customer Service, Non-Competitive Savings And Long Term CD Rates

I expressed my concern each time I withdrew my money and in the end when I officially closed my account.

I hear your concerns folks, and I'm not trying to downplay them, at all. But hopefully after a brief explanation, maybe you understand a little better on why the difference and drops in rates.

First off, let me say a sincere and heartfelt "Thank you" for what you folks do. It's because of our US military, that we are the greatest country in the world. Because of you folks, we have the freedoms we do. If I could get you 20% on a CD, it still wouldn't be enough for your sacrifices. So again, I personally can't thank you enough. 

KCField, SACU is a credit union. Credit unions are "not for profit" entities. Basically, they give profits back to their members. In 99.9% of the time, credit unions blow banks away on lending and deposit rates. That's the big difference there.

As for the other banks mentioned, I always tell my customers "I know it sounds odd, but be happy that we're not offering higher rates. Higer rates mean a bank needs deposits in a hurry, and it's usually not a good reason." Notice I say "Usually". There is an occassion here or there where a private bank is building a new location, so they will try and get new funds in to cover the costs. They may offer a special CD rate, and cap it off at $30 million in new money. Once they hit that magic number, CD special is over. Some banks choose to go public, then that opens a whole new can of worms with investors worrying about stock prices. If a bank is not lending, they don't want the extra liability of new funds, unless it's low or no cost funds. For example, a free checking account.

If a bank pays 2% on a $200,000 CD They should have $300,000 out in loans making 6 or 7%. That 4 to 5% spread is your main source of income. Most banks have cut down dramatically on their lending, so they don't have the assets they once had. Now, banks have to be careful they don't have more liabilities than assets (more deposits than loans). That is what's killing, and what has been the main killer of the failed financial institutions. So once again I say, if you love your bank, be happy that they're not paying super high rates. That means they are financially stable, and will probably be around another 100 years (Lord willing). I would recommend looking into a credit union for now. 

My posting intent was not to downplay USAA as they offer quite a few other services I am currently using and very happy with. I would still be with the bank were it not for the fact that a relationship within my family entitled me to become a member of a local credit union that pays much higher interest on my money. That said even the credit union loses when another institution very close by gives me a better rate on a short term CD. All three lose when no one can beat the bill pay service I get at a fourth bank. So I am a money mover and will go where the service and rate pays best.