MECU Has Nationally Available Money Market, 2.25% APY
Now through November 30, 2019, MECU (pronounced “ME-q”) is offering 2.25% APY on its Money Market Promotion on balances between $10k and $1 million. The minimum opening deposit is $10k of new money, defined as “funds not on deposit at MECU during the past 90 days.” Average daily balances below $10k and above $1 million earn 0.05% APY.
I had hoped there was a rate guarantee, but the fine print on the Savings Rates page states,
Promotion period and APY are subject to change at any time without notice.
Money Market Promotion Facts
- One Money Market Promotion per member.
- Rate not available on current MECU Money Market, Premier Money Market, or other promotional Money Market products.
- No opening or monthly maintenance fees.
- There is limited checking writing privileges.
- Transactions in excess of the six allowed monthly transactions may be subject to a $10 fee and/or account closure.
Availability
Headquartered in Baltimore, Maryland, MECU’s field of membership (FOM) offers a path to membership for almost any U.S. citizen or resident alien (18 years or older) with a valid Social Security number.
The online Membership Application lists four ways to join:
1. “I live, work, worship or attend school in Baltimore City.”
2. “I am a relative or housemate of someone who is eligible.”
3. “I’m affiliated with a qualifying employer/organization” (more than 250).
4. “Need another way to qualify?”
You can choose to support American Consumer Council (ACC), a non-profit that provides financial education to consumers. I would like to support ACC, making me eligible for MECU membership. I understand MECU will make a one-time support payment to ACC on my behalf.
Joining MECU and/or opening a Money Market Promotion can be done online or at any of eleven Maryland branches located in Baltimore (6), Catonsville, Cockeysville, Dundalk, Pikesville, and Randallstown (newly opened).
Prime Savings is your membership account ($5 minimum deposit) and
your gateway into MECU. It is required to open any additional accounts.
MECU participates in the CO-OP ATM network, but not the Share Branching network.
Credit Union Overview
MECU has an overall health grade of "B+" at DepositAccounts.com, with a Texas Ratio of 10.56% (excellent) based on June 30, 2019 data. In the past year, MECU has increased its total non-brokered deposits by $26.34 million, an above average annual growth rate of 2.63%. Please refer to our financial overview of MECU (NCUA Charter # 66787) for more details.
Chartered in 1936 as the Municipal Employees Credit Union, the founding members were Baltimore City employees who saw the need for affordable financial services for the working class. The original FOM was exclusive to those who worked for the City of Baltimore, including teachers, firefighters, and construction workers, in addition to Baltimore City government employees. Eighty-three years later, MECU is currently the sixth largest credit union in Maryland, with more than 109,000 members and assets in excess of $1.2 billion.
In 2018, MECU was one of 17 credit unions recognized with an American Saves award given out by the Washington, D.C. based Consumer Federation of American.
America Saves is a campaign that leverages the principles of behavioral economics and social marketing to motivate, encourage, and support low- to moderate-income households to save money, reduce debt, and build wealth.
How the Money Market Promotion Compare
When compared to 292 Money Market Accounts tracked by DepositAccounts.com that are available nationwide and have a minimum balance requirement of $10k or less (and without a low balance cap), MECU's Money Market Promotion APY currently shares the top spot with three other Money Market APYs offered by earn.bank, State Bank of India (IL), and MemoryBank.
The above rates are accurate as of 10/19/2019.
Looking for the best Money Market Account rates, either nationwide or state specific? Please refer to our Money Market Account Rates Table page.
Rate guarantees make more predictable returns of course, but no guarantee account still have their place. Theoretically they should pay higher rates than rate guaranteed accounts. So if you're in the zone for that game you could see a a better return with no rate guarantee accounts.
There IS NO SUCH THING AS A RATE GUARNANTTE!
Just don''t deposit more than a million here or your rate will drop to 0.05% APY for anything over.
Since they are NCUA, as long as you set up your account correctly so you are covered, your general exposure is roughly equal to the return on your investment lost between the time interest is no longer paid on your account and the time you reinvest the funds after receiving the proceeds from the NCUA. Plus of course the value of the time you have to devote to it.
Given that, I don't think most people care much about how safe an FI is as long as it's insured unless they have an account so large that the cost of uninvested funds is extreme or a particular aversion to going through that experience.
Customer service is another matter. The primary issue there is whether or not you can get reliable information when you set up the account. Many FIs give incorrect information at this stage, especially if you are doing an unusual transaction such as dealing with a much larger amount of funds than typical. There are special issues involved with these transactions that many CS reps are unequipped to handle. I always recommend speaking only to a manager if you are in this situation. You still have a significant chance of getting wrong answers, but it is typically a reduced chance. And of course read all the fine print. Unfortunately many of the issues are not addressed in writing that is readily available to you, so you cannot do a proper due diligence. But with effort you can take a pretty good guess about what to expect.
I agree that in theory an FI's rates should be inversely proportional to their financial ratings in order to be competitive in the market for depositors.
But in practice I think most depositors demand very little financial rating risk premium due to the insurance and also due to the fact that the vast majority of depositors have no idea what financial rating the FI they are depositing in is. The expected losses in the event of failure are minimal. So the relative chance of the FI's failure is not a critical variable in their calculus and the vast majority of depositors don't even bother finding out what it is.
That calculus might change a little for the most poorly rated FIs which may cause even an average depositor to think twice unless there is a significant risk premium. But again, most depositors in a poorly rated FIs are likely not even aware of their poor ratings.
In some cases they will just close the CU and pay depositors their funds. I have had banks that I had CDs taken over by the FDIC and the funds were paid out by the FDIC in less than a week. If you are over the insurance limits then you have to wait and see how much the FDIC pays out once the liquidate the failed institution. An example of this was Advanta bank.
The FDIC actually had a desk set up in the bank where they handed out checks to depositors. I remember standing on line for about 10 hours outside the bank.
I actually enjoyed myself because it was fun talking to the people in the line. But I was just a kid what did I know!
They still list the 2.25% rate on their website, however, the footnote said it is good until November 30.