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Small banks the best for big deals?

Posted by Cheryl Costa  October 3, 2008 10:25 AM

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A recent Wall Street Journal article suggests that as the big banks get bigger, the best deals for savers might be found at the smaller banks. For example, the average yield for a six month CD is just 2.09 percent but if you are willing to shop around and consider out-of-state and internet banks, you can quite easily find rates that approach and possibly exceed 4 percent.

What many people are doing is keeping a small checking account at the large institutions so they can have easy access to a branch office and large ATM network but they also have accounts in far-flung locations to capture more favorable CD and money market rates.

Credit unions are also becoming more and more popular and they often offer the best rates on CDs and consumer loans. Like regular bank accounts, deposits at credit unions are insured for up to $100,000. Many people don't even consider credit unions because they think the membership criteria is very narrow and they incorrectly believe they won't qualify. Years and years ago, it might have been somewhat difficult to join credit unions, but these days, the membership base for most credit unions is very broad. You might be surprised to find that you are probably eligible to join at least one or two credit unions based simply on where you live or where you work.

This blog is not written or edited by Boston.com or the Boston Globe.
The author is solely responsible for the content.

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ABOUT MANAGING YOUR MONEY
Local finance professionals share insights and advice on issues such as budgeting, managing debt, and retirement planning.

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D. Abraham Ringer is a CERTIFIED FINANCIAL PLANNER practitioner and a Financial Adviser with Morgan Stanley Global Wealth Management in Boston. He is registered in MA, NH, NY and several other states to which his articles are directed. For more information please visit www.morganstanleyfa.com/ringer
Financial Planning Association™ of Massachusetts has 900 members who specialize in the financial planning process. Many of its members engage in philanthropic pro bono work in their communities, recommend legislation, elevate public awareness, promote financial literacy, and advocate for sound economic and tax policies.
Odysseas Papadimitriou is the founder of CardHub.com, a credit card and gift card marketplace, and WalletHub.com, a personal finance site. He has more than 13 years of experience in the personal finance industry, and previously served as senior director at Capital One.

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