It may seem too good to be true, but United Federal Credit Union in Arkansas offers 6.01% APY guaranteed until 2010. This rate is insanely high, so one might wonder how they can survive. In fact, most mortgages have a rate lower than that; so this bank lends money at a lower rate than it borrows.
However, suspicions aside, this bank is real, and is insured by NCUA for the standard $250,000 of deposits. The way it operates at a profit remains a mystery.
The restrictions are pretty standard:
- 10 debit card transactions a month
- Direct deposit
- Electronic statements
The rate is paid on accounts up to $25,000 only – in other words, assuming the market rate is 1%, you can gain up to 5% times $25,000, or just over $100 a month.
Free ATM card (with fees reimbursed up to $25), free notary services, and free overdraft protection are nice additional features. Note that there is no minimum balance requirement.
To apply, you have to live in Michigan, Arkansas, Ohio, Pennsylvania or North Carolina. Definitely worth a consideration. The important thing to remember is not to leave more than $25,000 in that bank (since any excess earns just 0.25%), and to find a new account when the promotional 6.01% APY expires.
Check out more great Rates on Go Banking Rates.
