From: howard@sinoda.ultra.COM (Howard Simonson)
Newsgroups: misc.consumers
Subject: Re: Credit Union Deposit (Share) Interest (Dividend) Calculations
Date: 16 Aug 92 21:57:05 GMT
Reply-To: howard@ultra.com
Distribution: usa
Organization: Ultra Network Technologies

In article <7724@public.BTR.COM>, timlee@public.btr.com writes:
|> Based on the credit union that I just became eligible to use,
|> and some information from people using other credit unions, it
|> seems that it is much more common among credit unions to use
|> tricky or sleazy ways of calculating interest payments.  For
|> example:
|> 
|> 	* lowest balance of the month or quarter
|> 	* deposits after the 10th of the month do not gain
|> 	  interest until the 1st of the next month
|> 	* deposits from the 1st to the 10th of the month
|> 	  gain interest from the 1st of the same month
|> 	* funds withdrawn before the interest is posted
|> 	  do not earn interest
|> 
|> Every other depository institution that I've asked (bank,...
[munch]
|> 
|> Since credit unions are supposed to be run only in the interest
|> of their members, why is it that tricky or sleazy interest
|> calculations seem to be more common with credit unions?
|> Shouldn't members of such credit unions use their voting
|> power to change the credit unions' interest policies?

I tend to see these policies, where they are used, as having a positive
effect on us shareholders.  Maximising profit typically comes from making
educated long term investments, the longer the term, the better.  When
funds are yanked about a lot, it becomes much harder for the financial
planners to forecast and get into the instruments they would like to
acquire.  This is especially true for smaller credit unions that just don't
have the funds to adapt to swings in investment capital.

I use Tech. Fed., and its pretty big, and I do all the interest checking
through it, and it works the same as most any bank I've ever been with.

But when it comes to savings, some of the Tech. Fed accounts have the
"before/after the 10'th of the month" rule which I see as reasonable and
beneficial to the members trying to maximise their interest income on
their *savings* accounts.  The basic premise being, the financial planners
are acquiring instruments based on expected asset forecasts, and the
benefits of "savers" that were unwilling/unable to plan their transactions
w.r.t. the period of the account (monthly/quarterly), those benefits are,
in a sense, passed on to those of us that do.
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