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.
Posted by at
Labels: ,

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

    ReplyDelete

Subscribe to: Post Comments (Atom)
 

The content is provided for educational purposes only, with the understanding that neither the authors, contributors, nor the publishers of this site are engaged in rendering legal, accounting or other expert or professional services. If legal or other expert assistance is required, the services of a competent professional should be sought.

Comments appearing in response to articles appearing on this site do not necessarily reflect the views of the ABA. ABA makes no representations regarding the truth or accuracy of commentary or opinions that may be posted in response to the articles that appear on this website.

The inclusion herein of any link to a website, either in the text of an article or in a comment, does not denote any approval, sponsorship, or endorsement by the ABA, and ABA is not responsible for the content or opinions expressed on those linked websites or related commentary. This content is not licensed to third parties sites and is not affiliated with any third party site. Any reference to the author or this content on any third party site on the Internet is not authorized by the ABA.

It is the policy of the American Bankers Association to comply fully with all antitrust laws. Certain discussions should be considered off-limits, including those that contain competitively sensitive data such as price and cost information, or statements that could be construed as reflecting an attempt or desire to control or influence a particular market or markets. Future pricing or other prospective competitive information should never be shared.