What Financial Services Do Credit Unions Offer?

If you’re looking for financial services, you may want to consider checking out what your credit union has to offer. Many credit unions today offer more than just a checking and savings account, they’ve expanded into upgraded financial services tailored to meet many needs.

Credit unions are cooperative banking and financial companies. They are usually non-profit and cater to a particular group of people that work or live in the same place, for example. Credit unions are owned by the accountholders, who also participate in the management and direction of the company.

Today, credit unions offer more than just checking and savings accounts, although these low-cost basic accounts are the reason most people join. Most credit union savings accounts pay slightly more than their counterparts at for-profit banking institutions. Credit union checking accounts usually carry less restrictive requirements and lower fees than those at banks.

Credit unions have expanded into the realm of financial services as well. Most offer loans for a variety of needs, including personal loans, automobile loans and mortgage loans. Interest rates are usually a bit lower than those at other commercial lenders, and sometimes their qualification requirements are easier to meet. Before shopping for a automobile, boat, motorcycle or home improvements, you may want to consider talking to your credit union. Shopping with a pre-approved, lower rate loan from your credit union increases your bargaining power and your buying power. Many credit unions can also write student loans and signature loans.

In addition to loans, many credit unions offer additional financial services. These include dividend bearing checking accounts, which usually carry no fees and pay better interest than most bank’s savings accounts, and higher rate certificates of deposit. Most now offer low or no-fee access to automated teller machines and debit cards that can be used almost anywhere. Credit cards are also available at most credit unions, with discounted fees and more reasonable interest rates making them more attractive than national offerings.

Other financial services that you can expect to find at your credit union include stock brokerage services, mutual funds and personal financial planning. Some are even offering individual retirement accounts and insurance coverage. Of course, choosing someone to help with your financial planning is an important decision, but consider the helpful folks at the credit union when you are investigating your options. You may find that not only are their fees lower, but they offer many of the same types of products as other financial planners.

Credit unions offer many financial services today, and there is one out there for almost anyone. Check your local phone directory or online and you’ll most likely find one that you’ll qualify for. Since today’s credit unions are federally insured up to $100,000 by the National Credit Union Administration, your deposits are safe. When you start looking for financial services, consider your credit union as well.

What I Learned About Money from Million Dollar Baby

In Clint Eastwood’s award-winning movie, Million Dollar Baby, we see a positive, respectable, hard-working young woman physically destroyed when her dirty-dealing opponent lands a sucker punch after the bell.

It occurs to me that the same thing can happen with investments. The admirable fighter inside you tries to make your financial dreams come true. That’s the inner voice that tells you to work hard and invest smart. Your opponent is the part of you ruled by your emotions. Those emotions look for every opportunity to land a sucker punch and bring you down.

When I first met Bill, for example, he was worth $10,000,000, yet he was miserable. Because he’d grown up during the depression, he was convinced that he was always one step away from being broke, hungry and homeless. Keep in mind that Bill was taking only $150,000 a year from his $10 million nest egg. If you do the math, you’ll see that his withdrawal rate was barely 1.5%. So Bill really didn’t have to worry about money … but he worried anyway, and he was ruled by his fear and greed.

Because Bill was convinced that he was going to run out of money, he continued to make high-risk investments in the hopes of having more. He often lost a great deal of money with these chancy ventures, and this behavior made his fear a self-fulfilling prophecy. As his losses grew, his emotional need to make up for those losses grew, too. He took ever-greater risks and continued to dig himself into a miserable hole. It was a classic emotional smack-down.

Others dance the opposite direction. People who suffer great investment losses understandably become gun-shy. They are afraid of getting pounded again, so they swear off investing forever–and miss out on securing their financial future.

Are your emotions beating up your investments? Do you take risky chances for no good reason? Or is your anxiety making you afraid to come out of your corner fighting? Let me tell you something. In the arena of investments, your emotions are always in the back room working the speed bag just waiting for the chance to floor you. You need an edge if you want to stay in the ring.

How would you like to have the financial equivalent of Muhammad Ali as your trainer? Here are a few tips that can give you that kind of an edge.

First, recognize that you’ll never totally eliminate emotions from your financial decisions. You can’t knock them out. Second, know that you can neutralize them.

How? Remember the trainer’s advice: Always protect yourself.

One way to keep your guard up is to use stop-losses on all your investments. If you’re not familiar with a stop-loss, it’s a simple tool you use to reduce risk. Let’s say you buy a stock at $50, and you are convinced the stock is going to $80. Put a stop of $45 on the position. If the stock goes all the way, the stop doesn’t hurt you. But if you’re wrong, and the stock hits the mat, the stop-loss becomes very important.

Once the stock drops to a price of $45 or less, the position is sold. What happens if the stock later renews its strength and climbs back to $80? Too bad. You sold at $45, and you no longer hold the position. This is the downside to using stop-loss orders.

What happens if the stock continues its downward spiral and falls to $15? You don’t care because you sold the position at $45. Could this happen? It happens every day. Just ask people who bought tech stocks in the early part of 2000.

You can effectively use stop-loss orders to limit your downside risk on all your stock and mutual fund investments. If you do this, you’ll be able to go the 10 rounds without getting knocked silly by your emotions.

Financial Institutions Step It Up

We have all heard the stories of financial institutions exploiting consumers with shady practices such as exorbitant interest rates, hidden fees, and the like. These accounts anger us and, rightfully, those that practice these deeds should be exposed. Fortunately, not all reports are bad as evidenced in the way many companies are treating their customers in light of recent disasters such as Hurricanes Katrina and Rita. Let’s take a look at how some companies are responding in the wake of disaster.

1. Disaster Relief Programs. If you live in an area designated by the Federal Emergency Management Agency [FEMA] and own property, you may be eligible for relief depending on your financial institution and the program they have in place. One well known bank, for example, is automatically deferring mortgage and home equity loans for as long as ninety days, or three payments. In addition, this same bank is not assessing late charges for that timeframe, nor are they reporting negative information to affected consumers credit reports.

2. Payment Holidays. Similar to disaster relief programs, several credit card companies are allowing their customers to not make credit card payments for a two or three month time period. Two institutions have stated that they will not collect late fees, but in each case it is not clear whether customers will still be charged interest on their unpaid balances.

3. Loan Extensions. The financial arms of several automakers are allowing customers in affected areas to defer loan payments for up to three months. Essentially, these institutions are extending the loan’s length and adding the months to the end of the loan period without charging customers fees for this service.

If you live in any of the affected areas, it is best to contact your financial institutions directly to learn exactly what type of deferral plans, if any, they have in place. Some programs are less clear than others, particularly the payment holidays for credit card holders since it isn’t always apparent whether you will still be charged interest during the affected time period. Still, these types of compassionate gestures by certain financial institutions can create plenty of goodwill for consumers and they are the types of corporations certainly worth patronizing for the long term.