Friday, March 1, 2019

Credit Union Tax Subsidy Going to the Wealthy

Arkansas Federal Credit Union (Jacksonville, AR) is rewarding large balance money market accounts (MMAs) with higher interest rates than accounts with lower balances.

The following table appeared in Arkansas FCU's January 2019 newsletter (click on image to enlarge). The credit union is paying an Annual Percent Yield (APY) of 2.25 percent on MMAs with balances of at least $500,000, while it pays an APY of 1 percent on accounts with balances between $1,000 and $9,999.99.


Part of this higher APY is to compensate depositors for risk with balances exceeding the insured deposit limit. But it also indicates that Arkansas FCU is targeting its tax subsidy at higher net worth individuals.
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1 comment:

  1. Grandmaster BMarch 1, 2019 at 1:00 PM

    Hmmm, to me it looks like they are also paying a consumer with $1,000 25 times more than what Chase is currently offering their best customers. For their regular customers, it's 100 times higher.

    Are they targeting higher net worth individuals, or just paying higher rates to their members across the board?

    https://www.chase.com/personal/savings/interest-savings/interest-rates

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