About Ken Tumin

Ken Tumin founded the Bank Deals Blog in 2005 and has been passionately covering the best deposit deals ever since. He is frequently referenced by The New York Times, The Wall Street Journal, and other publications as a top expert, but he is first and foremost a fellow deal seeker and member of the wonderful community of savers that frequents DepositAccounts.

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How Much of Your Deposits are Held at Credit Unions?


Last week I asked "How Much of Your Bank Deposits Are Held At Internet Banks?" Out of 98 readers who voted, 58% responded that they had at least 70% of their deposits at internet banks. Some commenters in that post suggested asking another question in a poll: what percentage of your deposits are held at banks vs credit unions? That was a good idea. So for today’s poll, how much of your deposits are held at credit unions as opposed to banks?

This poll should be more straightforward than last week’s poll. There are only two types of institutions in the U.S. that can hold federally-insured deposits: banks and credit unions. For simplicity, I include thrifts in the bank category. Thrifts (also called savings and loan associations) are FDIC-insured just like banks, and from a depositor point-of-view, they can be considered equivalent.

Last week’s poll was complicated by the definition of internet banks. As several readers mentioned in the comments, the definition of an internet bank is a little fuzzy. Some might define an internet bank as any institution where they open accounts online rather than at a branch. Others may define it as a bank that has no branches and only takes deposits from the web.

How Total Bank and Credit Union Deposits Compare

Banks still hold a much larger percentage of overall deposits as compared with credit unions.

I was able to get some numbers from the FDIC and NCUA. The following shows how total deposits at all credit unions and banks have changed from December 31, 2011 to December 31, 2012:

  • Bank deposit change in 2012: $10.186 trillion to $10.817 trillion (+6.19%)
  • CU deposit change in 2012: $827 billion to $878 billion (+6.17%)

As you can see, banks still hold a much larger percentage of deposits. This makes sense based on the size of the megabanks. As I showed in 2011, the deposits at one of the megabanks is larger than the total deposits of all credit unions.

Another thing to note is that for both banks and credit unions, deposits have grown about the same. Before 2012, there were several years of higher deposit growth at credit unions. This SNL article shows this growth with a chart. There’s also a table that shows the deposit growth at the top five banks and the top five credit unions from 2006 to the first quarter of 2012.

Factors That Can Affect Savers’ Allocations Between Credit Unions and Banks

For savers who are very concerned with interest rates, I think we’ll see more of their deposits being held at credit unions. The reason is that credit unions often have the best rates. This has been especially true for CDs. For the last several years, the best CD deals have come from credit unions like PenFed, Navy Federal, Melrose, Patelco and DCU. If you keep most of your deposits in CDs, my guess is that most of your deposits are held at credit unions.

Even though credit unions often have the best CD rates, that hasn’t been the case with savings and money market accounts. There have been a few exceptions with credit unions like Alliant and Connexus, but in general, the best savings account rates have been at internet banks. Due to the low interest rates, some savers have been shifting their allocation from CDs to savings accounts. So savers may be finding that more of their deposits are now at internet banks.

Savers who want to keep more of their money in liquid accounts have another option besides savings and money market accounts. They can also earn high interest by keeping their money in high-yield reward checking accounts. Many of the best reward checking accounts are at credit unions. So that may keep more of savers’ deposits at credit unions.

Are you sticking with credit union CDs? Or are you moving more money into liquid accounts like money market and reward checking accounts? And are those liquid accounts at credit unions or at banks?

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Previous Comments
  |     |   Comment #1
I am only keeping token amounts in my share savings accounts at credit unions, just to retain my membership for when CD rates rise, and that won't be for quite some time. I don't currently have any CDs at credit unions, the last one I had matured last year. So, altogether, I have under $500 deposited at credit unions.
  |     |   Comment #2
Actually most of my savings is with credit unions due to the simple fact that credit unions offer the highest RCA rates in general.  This situation may change when RCA rate drops.
  |     |   Comment #3
At present, 70 percent of my deposit account funds are at credit unions, of which 91 percent of the funds are in certificate accounts with fixed maturities, and 9 percent are in money market, checking or savings accounts. My largest money market and savings accounts are held at an internet-only bank.
  |     |   Comment #5
Ken, thanks to your website I've learned about credit unions and how much better their CD rates are.  It never would have occurred to me how easy it is to join some of them nor did I realize how good their rates are.  So you've made a significant difference in my personal finances!  Just FYI, I think Andrews FCU is one of the best in terms of rates and the professionalism of their staff.  PenFed is good too.
  |     |   Comment #6
I have about 75% of my deposits divided between Penfed and Alliant. The money is in long term CDs. 
  |     |   Comment #7
Looks like I have about 33% of my deposits at CUs--primarily CDs/time deposits at Alliant and PenFed, followed by Velocity, Firstmark, Melrose and RAFE.
  |     |   Comment #8
I also am in the process of closing my CD's and MMA at Suntrust. and moving to Navy FCU.

I have just opened a new 2yr CD at 1.15% and a MMA that gets at least .55% where the MMA at Suntrust was at .30, and their 26mo CD at .80. In Nov the other CD comes due at ST and will also go to Navy. at which time I will close the MMA too.

yeah the rates suck, but what ya gona do, I'm not a marketeer, or a meatel head, really don't need it that bad, just need enough to pay the usual bills.

I figure 2 years is long enough at this point before rates do something besides go south, or the whole system could colapse by than and nobodys money will be worth anything.


  |     |   Comment #9
I'm at the "30-70%" level due in large part to PenFed's 5% ""10 year glitch," your reporting of it, and their honoring the rate despite their error. I recently placed another significant chunk in a credit union at 2.28% for 60 months, discovered once again because of your reporting. Ken: I sincerely thank you for all your help.

  |     |   Comment #10
What credit union pays 2.28%?
  |     |   Comment #11
i have seen some good rates at credit unions as compared to banks....but never opened account at credit union because i am not sure how safe credit union is as compated to bank. any idea ?
  |     |   Comment #12
credit union deposits under ncua is the same as fdic full faith and credit us a cu gives you more for money no stockholders etc in a cu you are the owner not the stockholder all funds earned at cu go to owner
  |     |   Comment #13
It's not much difference in rates, but lately I have been finding better rates at banks instead of credit unions.  A lot of credit unions (Penfed and Navy for exampe) have really reduced their rates a lot lower than they use to be.
  |     |   Comment #14
Currently 76% of "my deposits" are at CU's, 99% of which
are in CD's.  The remaining 24% are in Ally CD's (21%) and
in SFGI Savings (3%).

This excludes an annuity, an IRA, and a mutual fund which,
in aggregate, are twice the amount of "my deposits" total.

I pretty much follow the best rates; back in the good old
5% - 6% days (1999-2000) this picture would have included
a greater bank presence.
  |     |   Comment #15
About 75% of my deposits are in Credit Unions
  |     |   Comment #16
100% held at credit union
  |     |   Comment #17
To Anonymous #10: To answer your question, City County CU of FL is paying 2.28% for 60 months. Unfortunately, membership is limited to several FL counties.
  |     |   Comment #18
   Well i'm about 50 - 50 on deposits i'd probably be all credit unions but back in 08 i opened 3 long term accounts at internet banks two at key direct 1 for 5 years at 5.52 % and a 10 year at 5.81% and the other account at capitol one for 5.40% for 7 years .. i missed out on the internet vs local bank survey from last week but i'm well over 95% out of state accounts and will probably always be the local banks here are terrible and always has been.........,

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