The current state of our US economy has all of us not only noticing higher prices across the board, but also having to make real-life decisions to try and cope and keep up. It is smart to look for ways to save a little bit more, pay a little bit less, and maybe even make a little more. In your quest, you may have noticed some financial institutions offering what appear to be very high dividends on deposits, many of which are admittedly higher than what 1st Nor Cal offers. So, I thought I’d take a minute to share my perspective on how we set our Savings and Money Market account interest rates.
You are right - several financial institutions are currently offering and promoting higher rates on their deposit products than 1st Nor Cal. As you might imagine, there are myriad considerations that any given financial institution must make in establishing their dividend rates. Long time members of 1st Nor Cal Credit Union hopefully have noticed, can appreciate, and have benefited from our conservative approach. Our loan rates are consistently among the lowest in the region, our mortgage loans have incredibly low fees compared to our local competitors and even nationwide, our Visa credit card rates are as low as 8.90% APR* and FIXED (not adjustable), and our auto loans are regularly the lowest amongst our competitors. Additionally, our account fees across the board are not just slightly lower, they are up to 10 times lower (especially compared to the Mega Banks).
It is a balancing act for any financial institution and our focus has always been to provide exceptional value and service to our members. You may have noticed over the years that unlike other financial institutions, we rarely promote "special limited time offers" for loans or deposits. Instead, we promote our normal everyday low rates on loans and then work hard to set our dividend rates as high as possible with a conservative long-term outlook that guarantees the safety and stability of the credit union. Our loan rates are always low and we don't chase after deposits like many financial institutions do. Most of the financial institutions offering the very high dividend rates are offering them for a very short period of time, often with special conditions attached, and after the "special" term or offer expires, the high rate disappears and depositors are left as customers of an institution with very little value (due to their higher fees, higher interest rates, and poor service). Many of these institutions are also starving for liquidity. The federal government mandates that financial institutions operate within certain liquidity standards in an effort to ensure the institution's financial viability. Many of them function on a razor-thin margin whereby they often have to aggressively solicit deposits in order to have the liquidity to make loans to their customers. We don't do that. 1st Nor Cal has considerably more than enough money to lend and more-than-ample funds to provide an ultra-safe, stable financial environment for our members, guaranteeing their ability to withdraw their funds as needed.
There is much more I could offer in defense of our rate policy, but I just wanted to touch on a few of the key elements.
Finally, I want you to know how deeply we appreciate your membership. If there is ever anything we can do to help you, please let us know. Also, we do have an investment services professional available to you, should you want to consider investment and deposit strategies based on your own personal situation and financial goals. You can find more information on these services on our website under the “Investment Services” tab.
Best regards,
David Green, President/CEO
*Annual Percentage Rates (APR) are subject to change without notice. Rate, maximum term, maximum loan amount and advance amount based on credit qualifications. All loans subject to credit approval. Must be 18 or older to apply.