CU Rates Hit Bottom
WASHINGTON - (07/02/04) -- Credit unions are expected to takeand wait and see attitude to Wednesday's Fed rate cut beforeraising their dividend rates, which have hit rock bottom over thelast few months. "Credit unions are going to lag in raising theirdividend rates because even though they're so low, they're stillhigher than what the banks are paying," Bill Hampel, chiefeconomist for CUNA, told The Credit Union Journal. Average ratespaid by credit unions and banks have plunged to what are believedto be all-time lows this year. Data compiled by DataTrac Corp.,which tracks 1,000 credit unions, show the average rate paid onregular shares fell this week to a paltry 0.73%; while the averagefor share drafts (checking) dipped to an anemic 0.44% and for moneymarket shares to just 0.92%. But those still represent a bargaincompared to what the banks are paying: 0.46% for regular savings;0.33% for checking; and 0.52% for money market accounts.