BANK RATES LESS LUCRATIVE THAN SAVINGS ALTERNATIVES, GROUPS SAY.Byline: Marcy Gordon Associated Press Associated Press: see news agency. Associated Press (AP) Cooperative news agency, the oldest and largest in the U.S. and long the largest in the world. Americans are losing tens of billions of dollars in interest each year by keeping their money in traditional bank savings accounts Savings Account A deposit account intended for funds that are expected to stay in for the short term. A savings account offers lower returns than the market rates. Notes: instead of certificates of deposit and credit union accounts, the Consumer Federation and a credit union group say. Switching to certificates of deposit and from banks to credit unions ``is really a no-brainer. People ought to be doing it,'' Stephen Brobeck, executive director of the Consumer Federation of America The Consumer Federation of America (CFA) is a non-profit organization founded in 1968 to advance the consumer interest through research, education and advocacy. According to CFA's website, its members are approximately 300 consumer-oriented non-profits, which themselves have , told a news conference Tuesday. Brobeck said Americans have about $1.5 trillion in traditional savings accounts and money-market deposit accounts, which pay on average less than 2 percent annually. Rates on certificates of deposit - also federally insured - usually exceed 4 percent. In addition, credit unions on average pay more than 1 percentage point above what banks offer on the same kind of accounts, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. Brobeck and Dan Mica, president and chief executive officer of the Credit Union National Association. Their figures were based on data compiled by Bank Rate Monitor, an industry trade publication. Credit unions, which have some 77 million members nationwide, often are able to offer lower rates on loans and higher interest on savings than banks because they are cooperatively owned and don't have to pay dividends to shareholders. In addition, credit unions are exempt from federal taxes - a subsidy subsidy, financial assistance granted by a government or philanthropic foundation to a person or association for the purpose of promoting an enterprise considered beneficial to the public welfare. that amounts to about $1 billion a year, according to Congress' Joint Committee on Taxation. The credit unions' tax exemption tax exemption, immunity from the requirement of paying taxes. Federal, state, and usually local law provide exemption from taxation for a wide variety of organizations, usually not-for-profit, such as churches, colleges, universities, health care providers, various has been bitterly contested by banks, which fought legislation Congress enacted last year allowing credit unions to include more than one occupational group in their membership - as long as each group doesn't exceed 3,000 people. Responding to the statements Tuesday by the Consumer Federation and the credit union group, an American Bankers Association The American Bankers Association (ABA) is comprised of banks and other financial institutions. It seeks to promote the strength and profitability of the banking industry by Lobbying federal and state governments, building industry consensus on key issues, and providing products and official said banks offer consumers a wider range of financial products, such as brokerage and trust services. ``Savings accounts are not the whole picture,'' said Nancy Ness Judy, consumer affairs manager for the bankers' group. For example, she said, banks generally offer lower rates than credit unions on home mortgage loans. |
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