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Email this9:01 pm
Can any one tell my why is it only the off-shoots of the Manitoba credit unions (like Maxa, Accelerate, Outlook Financial, etc) that are offering virtual banking with some of the best interest rates for savings accounts and GIC's? I am excluding ING and Ally from my question. While there is no doubt in my mind that Citizens Bank was the best and their service and rates exceeded most...there reason for folding was because the banks and other CU's began to offer virtual banking as good as Citizens.
Why so many in Manitoba?
What is their reasoning?
Why aren't other CU's in other provinces offering same or similar?
12:11 am
These are good questions and I don't really know the answers either. Why Manitoba? My guess is that it's a liquidity issue. Unlike the chartered banks, credit unions can't create money out of thin air to lend out. They have to have deposits in order to lend. Given the high rate of CU usage in Manitoba, they probably have a rather large demand for loans that they can't meet with just local deposits. So many of them have opened their bond and searched for deposits country-wide. This is purely speculation though on my part, perhaps somebody in the biz will chime in.
2:09 am
December 12, 2009
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I think you've got a good handle and read on things, Jim.
It's also pure supply and demand. So much competition for deposits coupled with less lending happening overall these days (people are accelerating mortgage payments and paying up to 20% of the original principal amount of the mortgage now), banks don't need our money that badly so they pay peanuts.
Cheers,
Doug
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