MONEY Banking

The Easiest Way to Reduce the Bank Fees You Pay

Where to find free checking
James Worrell—Getty Images

Shift your money over from a big bank to a credit union

Looking to avoid those annoying—and expensive—monthly fees on your checking account? You might want to take your funds to a credit union.

A survey released Thursday by Bankrate.com found that 72% of America’s largest credit unions still offer standalone free checking accounts. And another 26% waive fees if customers meet certain requirements, like accepting e-statements or opting for direct deposit.

Credit unions look ever more attractive compared to the nations biggest retail banks—only 38% of which now offer free checking, down from 65% five years ago.

Even when credit unions do levy checking fees, those charges are typically between $2 and $3, about half of what traditional banks will deduct.

Prone to overdrawing your checking account? You’d do better at a credit union on that count, too. The average overdraft fee at unions is $26.78; the average for banks: $32.74.

In spite of the potential savings, however, a credit union isn’t right for everyone. Find out if you could benefit from becoming a member by checking our guide. And find a credit union that offers free checking with this list compiled by Bankrate.com.

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MONEY

The 5 Funniest ‘Saturday Night Live’ Skits About Money

SATURDAY NIGHT LIVE: WEEKEND UPDATE THURSDAY, (from left): Amy Poehler, Seth Meyers, Kenan Thompson, (Episode 101, aired Oct. 9, 2008), 2008.
Dana Edelson—©NBC/Courtesy Everett Collectio

As the NBC comedy show celebrates 40 seasons on the air, here are MONEY's picks for the best sketches making light of awkward bank ads, the financial crisis, and more.

Over the course of a four-decade run, Saturday Night Live has taken aim at most of the trappings of American financial life—even the things you wouldn’t think were funny, like stock market crashes and consumer debt. In honor of the show’s star-studded anniversary celebration this Sunday, here are MONEY’s favorite SNL sketches about money, spanning nearly all of its 40 years.

1. Fix It! (Parts One and Two)

In these two Weekend Update segments, Kenan Thompson plays Oscar Rogers, a “financial expert” who describes a path out of the 2008 financial crisis.

Best line: “Fix it! It’s a simple three-step process. Step one: Fix! Step two: It! Step three: Fix it! Then repeat steps one through three until it’s all been fixed!”

 

 

In that one phrase, Thompson gives voice to the powerlessness and frustration felt by laid-off workers and pummeled investors worldwide. (We wonder what John Belushi’s samurai stockbroker would have to say about that.)

2. First CitiWide Change Bank

This 1988 commercial parody—featuring Jan Hooks, Kevin Nealon, and Jim Downey—highlights just how unimpressive financial services can be, in an ad for a bank that brags about offering change to customers. And they don’t mean it in the Obama way.

 

Best line: “We are not going to give you change that you don’t want. If you come to us with a hundred-dollar bill, we’re not going to give you two thousand nickels—unless that meets your particular change needs.”

Joking about how weak bank services are would be funnier if it weren’t so true.

3. “Don’t Buy Stuff You Cannot Afford”

Steve Martin and Amy Poehler play a couple in need of a budgeting intervention in this 2006 skit, featuring Chris Parnell as the author of a, shall we say, intuitively titled book about how to control spending.

Best lines:

Parnell: The advice is priceless and the book is free.”
Poehler: “Well, I like the sound of that.”
Martin: “Yeah, we can put it on our credit card!”

If only getting out of debt were as simple as the skit suggests; in reality, paying off loans and gaining financial stability can be hard no matter how smart or hardworking you are. But we’d still pony up for a copy of Stop Buying Stuff magazine.

4. Consumer Probe: Irwin Mainway

This 1976 classic features Candice Bergen as a reporter and Dan Aykroyd as the sunglass-sporting Irwin Mainway, purveyor of such children’s toys as Johnny Switchblade, Mr. Skin Grafter, Doggie Dentist, and Bag o’ Glass.

 

Best lines:

Bergen: “I just don’t understand why you can’t make harmless toys like these wooden alphabet blocks.”
Aykroyd: “You call this harmless? I got a sliver!”

5. Metrocard

Roseanne Barr plays a 24-hour hotline representative for the fictional “Metrocard” credit card in this 1991 sketch, which sends up confessional-style TV ads highlighting service. Phil Hartman plays a seemingly satisfied customer.

Best lines:

Barr: “And then he gets really mad and tells me I’m supposed to help him! You know, like I’m his mom or something. So I say, ‘Why don’t you call home and have somebody wire you the money? Or call your company and tell them the problem? Or, better yet, why don’t you take a personal check out of your checkbook, roll it up real tight, and then cram it!'”

Hartman: “She gave me several options.”

TIME Saving & Spending

If You’re Going to Buy a Car, Do It Now

A General Motors Co. Car Dealership Ahead Of Earnings Figures
Daniel Acker—Bloomberg/Getty Images General Motors Co. Chevy Malibu vehicles sit on the lot at JP Chevrolet dealership in Peru, Illinois, U.S., on Wednesday, July 23, 2014.

If you need a car loan, this is your year

Financing a car — especially if you have good credit — has never been this cheap. Don’t wait too long to take advantage of this, though. By this time next year, if not sooner, borrowing costs will be ticking up again.

Personal finance site WalletHub.com surveyed 157 lenders and consulted with experts in a new report about car loans. The average car on the road today is about 11 and a half years old, so maintenance and repair costs are likely to be mounting. More than half of the experts consulted for this study say interest rates are likely to rise within 12 months.

Right now, though, financing is dirt cheap. Among all financing sources, the average APR on a new car loan for someone with good credit is right around 3% for new cars and just over 3% for used cars. The picture is brightest for people with credit scores above 720. On average, these buyers can get away with paying less than $1,600 in financing charges over the life of a 5-year, $20,000 new car loan.

For a new car, if you go through the manufacturer, the average best rate is right around 2% for a new car and just under 5% for a used car. Nissan, Toyota and Chrysler offer the lowest rates for customers with high credit.

The average at credit unions is also under 3% for new car loans. (One note: While the study looks at each manufacturer’s APR for a 36-month loan term, most car buyers opt for 60-month loan terms, which tend to have slightly higher rates. These averages also assume the buyer has good credit.)

The best deals can often be found by financing directly through the dealerships, the study finds. On average, dealers are offering rates 35% below average.

The study also suggests credit unions as a good place to look for a car loan, with rates 25% below average). National banks offer average rates, while regional banks tend to be more expensive, with rates 40% above average. Still, your milage may vary, as the saying goes, so it’s a good idea to check out all your options.

It also pays to shop around if you plan to lease. Although the report finds that Nissan, Volvo and Infiniti offer the best lease rates, many car companies’ financing arms are still lacking in transparency when it comes to the actual APR you’re getting, so you don’t actually know if you’re getting the best rate unless you do some legwork before you get to the dealership.

Even people with fair credit can benefit from today’s super-low rates. The study finds that people with credit scores between 620 and 659 will pay an average of just over $7,000 over the life of the loan, a drop of nearly $500 over the past three months. Across all lending sources, the average APR for someone in this credit bracket is about 12.5% for a new car and just over 13% for a used car.

Since that’s a pretty sizable gap, if you’re thinking of buying a car this year, it might benefit you to take some steps to raise your credit score before you go shopping — you could effectively be saving more than $5,000 over the life of the loan.

 

MONEY financial crisis

By This Measure, Banks Are Safer Today Than Before the Financial Crisis

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iStock

At least from the standpoint of liquidity, the nation's banks have come a long way over the last few years to build a safer and more stable financial system.

If you study the history of bank failures, one thing stands out: While banks typically get into trouble because of poor credit discipline, their actual failure is generally triggered by illiquidity. Fortunately, banks appear to have learned this lesson — though we probably have the 2010 Dodd Frank Act to thank for that — as lenders like Bank of America BANK OF AMERICA CORP. BAC 0.19% and others have taken significant steps over the last few years to reduce liquidity risk.

It’s important to keep in mind that banks are nothing more than leveraged funds. They start with a sliver of capital, borrow money from depositors and creditors, and then use the combined proceeds to buy assets. The difference between what they earn on those assets and what they pay to borrow the funds makes up their net revenue — or, at least, a significant part of it.

Because this model allows you to make money with other peoples’ money, it’s a thing of beauty when the economy is growing and there are no warning signs on the horizon. But it’s much less so when things take a turn for the worse. This follows from the fact that a bank’s funding could dry up if creditors lose faith in its ability to repay them, or if they need the money themselves. And if a bank’s funding sources dry up, then it may be forced to dispose of assets quickly and at fire-sale prices in order to pay its creditors back.

This is why some funding sources are better than others. Deposits are the best because they are the least likely to flee at the first sign of trouble. Within deposits, moreover, insured consumer deposits are preferable, at least in this respect, to large foreign, corporate, or institutional deposits, which carry a greater threat of flight risk because they often exceed the FDIC’s insurance limit.

The second most stable source of funds is long-term debt, as this typically can’t be called by creditors until it matures. Finally, the least stable source consists of short-term debt, including overnight loans from other banks as well as funds from the “repo” and/or commercial paper markets. Because these must be rolled over at regular intervals, sometimes even nightly, they give a bank’s creditors the option of not doing so.

It should come as no surprise, then, that many of the biggest bank failures in history stemmed from an over-reliance on either short-term credit or on large institutional depositors. This was the reason scores of New York’s biggest and most prestigious banks had to suspend withdrawals in the Panic of 1873, during which correspondent banks located throughout the country simultaneously rushed to withdraw their deposits from money center banks after panic broke out on Wall Street. This was also the case a century later, when Continental Illinois became the first too-big-to-fail bank in 1984. It was the case at countless savings and loans during the 1980s. And it’s what took down Bear Stearns, Lehman Brothers, and Washington Mutual in the financial crisis of 2008-09.

A corollary to this rule is that one way to measure a bank’s susceptibility to failure — which, as I discuss here, should always be at the forefront of investors, analysts, and bankers’ minds — is to gauge how heavily it relies on short-term credit and institutional deposits as opposed to retail deposits and long-term loans. If a bank relies too heavily on the former, particularly in relation to its illiquid assets, then that’s an obvious sign of weakness. If it doesn’t, then that’s a sign of strength — though, it’s by no means a guarantee that a bank is otherwise prudently managed.

One way to gauge this is simply to look at what percentage of a bank’s funds derive from short-term loans as opposed to more stable sources. As you can see in the chart below, for instance, Bank of America gets roughly 16% of its funds from the short-term money market. That’s worse than a smaller, simpler bank like U.S. Bancorp, which looks to the money market for only 9% of its liquidity, but it’s nevertheless better than, say, Bank of America’s former reliance on short-term funds, which came in at 31% in 2005. Indeed, as William Cohen intimates in House of Cards, one of the “dirty little secret[s]” of Wall Street companies prior to the crisis was how much they relied on overnight repo funding to prop up their operations.

A second way to measure this is to compare a bank’s funding sources to the liquidity of its assets, and loans in particular, as loans are one of the least liquid types of assets held on a bank’s balance sheet. This is the function of the loan-to-deposit ratio, which estimates whether a bank’s deposits can singlehandedly fund its loan book. If deposits exceed loans — though, remember that not all deposits are created equal — then a bank could theoretically withstand a liquidity run by pruning its securities portfolio or using parts thereof as collateral in exchange for cash. This would protect it from the need to unload loans at fire-sale prices which, in turn, could render the bank insolvent.

Overall, as the chart above illustrates, the bank industry has aggressively reduced its loan-to-deposit ratio since the crisis. In 2006, it was upwards of 96%. Today, it’s closer to 70%. It can’t be denied that some of this downward trend has to do with the historically low interest rate environment, which reduces the incentive of depositors to alternate out of deposits and into low-yielding securities. But it’s also safe to assume that banks have intentionally brought this number down to shore up their balance sheets, and in response to the heightened liquidity requirements of the post-crisis regulatory regime.

Whatever the motivations are behind these trends, one thing is certain: At least from the standpoint of liquidity, the nation’s banks have come a long way over the last few years to build a safer and more stable financial system. This doesn’t mean we won’t have banking crises and liquidity runs in the future, as history speaks clearly on the point that we will. But it does mean that, for the time being anyhow, this is one less thing for bank investors to worry about.

TIME financial regulation

Why It Matters That Congress Just Swapped The Bank Swap Rule

US-ECONOMY-FINANCE-BANKING-BOFA
NICHOLAS KAMM—AFP/Getty Images

A controversial change to the Dodd-Frank financial reforms trades more risk for taxpayers to get more profits for banks and their corporate clients

Banks may be officially allowed to get back in the casino business again soon.

Hidden as a rider in the $1.1 trillion continuing resolution omnibus bill—the hulking “Cromnibus”—that passed the U.S. House last night are a few, measly pages that pack a whole lot of punch. They repeal what’s known as the Lincoln Amendment in the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act.

The Lincoln Amendment, which you’ll also see referred to in other articles as “Section 716″ or the “the swaps push-out rule,” was, if not Dodd-Frank’s heart and soul, than at least one of its vital organs. It says, basically, that banks can make risky bets on behalf of paying clients, but if they screw up and get into trouble like they did in 2008, then taxpayers aren’t responsible for bailing them out.

It did that by requiring that banks set up two big buckets: one that was backed by taxpayers (FDIC-insured), and one that was not. The idea was that banks would keep all of their normal, plain-vanilla banking activities in the FDIC-insured bucket, and then “push out” swaps and other risky contracts, like exotic, customized, and non-cleared derivatives, into the other bucket. (Swaps are contracts that allow banks to hedge their risks or speculate on everything from interest rates to currency prices. Credit default swaps contributed to blowing up the economy in 2008. Warren Buffet once called these sorts of derivatives “financial weapons of mass destruction.”)

If the Cromnibus passes the Senate in the form that it passed the House last night, the Lincoln Amendment will be officially repealed. Dead. Kaput. Gonzo. The swap casino will again operate with the tacit backing of taxpayers. If markets go haywire, as they did in the last financial crises, taxpayers may again find themselves forced with a choice between bailing out the casino owners and a systemic financial collapse.

The Bipartisan Policy Center, which is generally in favor of financial regulation, says people shouldn’t overreact to that news. It released a statement yesterday saying, in essence, “Relax, we still have the Volcker rule,” a reference to a different provision of Dodd-Frank that bans banks from using taxpayer-backed accounts to make their own bets on the future movement of markets.

But as the folks at the Roosevelt Institute point out, that argument doesn’t really make sense. It’s like saying that because you’re wearing a t-shirt, you don’t need a sweater. It’s true that the Lincoln Amendment and the Volcker rule overlap in some ways, but their coverage is different.

The heart of the Volcker rule is all about proprietary trading, which is when banks trade for their own profits and not on behalf of their customers. It’s similar to the Lincoln Amendment in that it doesn’t specifically outlaw anything; it says that banks can proprietary trade all they want, but if they get into trouble, taxpayers aren’t bailing them out. Lots of people in the financial world think that the Volcker rule is the most important part of Dodd-Frank, but it doesn’t cover everything.

The Volcker rule, for example, doesn’t apply to all risky financial products, like exotic and uncleared credit default swaps. That’s where other regulations, including the Lincoln Amendment, took up some of the slack. Unlike the Volcker rule, the Lincoln Amendment did apply to exotic and uncleared credit default swaps, and required that banks “push out” swaps into a bucket that was not backed by the taxpayers.

The best argument for not freaking out about the repeal of the Lincoln Amendment is that it wasn’t nearly as strong as its drafters intended it to be. The final version had loopholes the size of Montana. For example, while the Lincoln Amendment was intended to lasso all risky instruments, by the time all was said and done, it really only applied to about 5% of the derivatives activity of banks like Bank of America, Citigroup, JPMorgan Chase, and Wells Fargo, according to a 2012 Fitch report.

In other words, the banks are in the casino business whether or not the Lincoln Amendment is repealed. But liberal Democrats, including Senators Sherrod Brown of Ohio and Elizabeth Warren of Massachusetts as well as a handful of conservative Republicans, like Rep. Walter Jones of North Carolina, say 5% of protection is better than none at all. They oppose the Cromnibus so long as that rider is in it.

House Republicans, for their part, say eliminating the Lincoln Amendment would streamline regulation, boost the economy, and “protect farmers and other commodity producers from having to put down excessive collateral to get a loan,” according to a summary statement. The bill is expected to pass the Senate, rider and all.

TIME Companies

U.S. Hits Deutsche Bank With $190 Million Tax Fraud Lawsuit

A general view of Deutsche Bank on Sept. 5, 2011 in London.
Dan Kitwood—Getty Images A general view of Deutsche Bank on Sept. 5, 2011 in London.

Justice Department has accused the banking giant of using shell companies to conceal profits and avoid paying taxes

The Justice Department has sued Deutsche Bank for fraud over an alleged scheme to avoid paying federal taxes.

The government is seeking more than $190 million in back taxes plus penalties and interest.

The lawsuit, which was filed on Monday in federal court in New York, alleges that Deutsche Bank DB -1.23% engaged in a series of transactions meant to evade federal income taxes — leaving the U.S. government “with a significant, uncollectable tax bill,” according to the Justice Department.

“Through fraudulent conveyances involving shell companies, Deutsche Bank tried to make its potential tax liabilities disappear,”Manhattan U.S. Attorney Preet Bharara said in a statement. “This was nothing more than a shell game.”

The government went on to describe the alleged fraud, which included the German bank’s creation of three separate “shell companies” as well as a series of subsequent transactions involving those companies that federal authorities claim were designed to avoid federal tax laws.

Deutsche Bank responded to the allegation in a statement to Fortune, saying: “We fully addressed the government’s concerns about this 14-year old transaction in a 2009 agreement with the IRS. In connection with that agreement they abandoned their theory that [Deutsche Bank] was liable for these taxes, and while it is not clear to us why we are being pursued again for the same taxes, we plan to again defend vigorously against these claims.”

This article originally appeared on Fortune.com

MONEY alternative assets

Lending Club’s $4 Billion IPO Puts Peer-to-Peer Lending in the Mainstream

IOU note
Getty Images

Lending Club priced its IPO on Monday, putting it in the ranks of the biggest public offerings ever for an Internet company. Here's what you need to know about peer-to-peer lending.

UPDATE: On Monday, peer-to-peer lending company Lending Club announced it would be pricing its upcoming IPO at $10 to $12 a share in an effort to raise as much as $692 million. (Click here to read the filing.) At the midpoint of the range, that would value the company at around $4 billion. Now that P2P lending has firmly entered the mainstream (and then some), it’s worth looking again at the advice we published in August, when Lending Club filed to go public, on how P2P lending works and how best to use Lending Club and similar services.

Your bank makes money off borrowers. Now you have the opportunity to do the same. One of today’s hottest investments, peer-to-peer lending, involves making loans to strangers over the Internet and counting on them to pay you back with interest. The concept may be a bit wacky, but the returns reported by sites specializing in this transaction—from 7% to 14%—are nothing to scoff at.

Investors aren’t laughing either. Lending Club, one of the leading peer-to-peer lending companies, filed to go public on Wednesday. The New York Times reports the company is seeking $500 million as a preliminary fundraising target and may choose to increase that figure.

Such lofty ambitions should be no surprise, considering that the two biggest P2P sites are growing like gangbusters. With Wall Street firms and pension funds pouring in money as well, Lending Club issued more than $2 billion of loans in 2013, and nearly tripled its business over the prior year. In July, Prosper originated $153.8 million in loans, representing a year-over-year increase of over 400%. The company recently passed $1 billion in total lending. “A few years ago I would have laughed at the idea that these sites would revolutionize banking,” says Curtis Arnold, co-author of The Complete Idiot’s Guide to Person to Person Lending. “They haven’t yet, but I’m not laughing anymore.”

Here’s what to know before opening your wallet.

How P2P Works

To start investing, you simply transfer money to an account on one of the sites, then pick loans to fund. When Prosper launched in 2006, borrowers were urged to write in personal stories. Nowadays the process is more formal: Lenders mainly use matching tools to select loans—either one by one or in a bundle—based on criteria like credit rating or desired return. (Most borrowers are looking to refi credit-card debt anyway.) Loans are in three- and five-year terms. And the sites both use a default investment of $25, though you can opt to fund more of any given loan. Pricing is based on risk, so loans to borrowers with the worst credit offer the best interest rates.

Once a loan is fully funded, you’ll get monthly payments in your account—principal plus interest, less a 1% fee. Keep in mind that interest is taxable at your income tax rate, though you can opt to direct the money to an IRA to defer taxes.

A few hurdles: First, not every state permits individuals to lend. Lending Club is open to lenders in 26 states; Prosper is in 30 states plus D.C. Even if you are able to participate, you might have trouble finding loans because of the recent influx of institutional investors. “Depending on how much you’re looking to invest and how specific you are about the characteristics, it can take up to a few weeks to deploy money in my experience,” says Marc Prosser, publisher of LearnBonds.com and a Lending Club investor.

What Risks You Face

For the average-risk loan on Lending Club, returns in late 2013 averaged 8% to 9%, with a default rate of 2% to 4% since 2009. By contrast, junk bonds, which have had similar default rates, are yielding 5.7%. But P2P default rates apply only to the past few years, when the economy has been on an upswing; should it falter, the percentage of defaults could rise dramatically. In 2009, for example, Prosper’s default rate hit almost 30% (though its rate is now similar to Lending Club’s). Moreover, adds Colorado Springs financial planner Allan Roth, “a peer loan is unsecured. If it defaults, your money is gone.”

How to Do It Right

Spread your bets. Lending Club and Prosper both urge investors to diversify as much as possible.

Stick to higher quality. Should the economy turn, the lowest-grade loans will likely see the largest spike in defaults, so it’s better to stay in the middle to upper range—lower A to C on the sites’ rating scales. (The highest A loans often don’t pay much more than safer options.)

Stay small. Until P2P lending is more time-tested, says Roth, it’s best to limit your investment to less than 5% of your total portfolio. “Don’t bank the future of your family on this,” he adds.

MONEY Banking

Guess Which Big Bank Has the Unhappiest Customers

Shovel burying money in hole in backyard
Summer Derrick—Getty Images

A new poll finds consumers are disappointed across the board with their banks—but credit unions fared far better.

Customers have grown less happy with their banks over the past year, according to a new American Customer Satisfaction Index survey. Blame low interest rates and high fees, as well as decreasing access to ATMs and branch locations.

More than 1,500 Americans were polled on their experiences with their banks and credit unions for the study, which was released on Tuesday.

Affirming previous studies from other organizations, consumer satisfaction was the lowest at big banks—with Bank of America and Wells Fargo faring the worst among their peers.

Screen Shot 2014-11-17 at 5.24.36 PM
Source: ACSI

Although the survey results showed Bank of America has improved in some specific areas, a spokesperson for the bank wrote, “We know we still have some work left to do.”

The decline in scores on fees and service for retail banks overall coincides with a big growth in the number of people banking at credit unions as an alternative. “Consumers are finding that the best way to avoid bank fees may be to avoid banks altogether,” says ACSI founder Claes Fornell.

The shift isn’t surprising, given that credit unions score better on speed and “courtesy and helpfulness of staff” and can offer twice as much interest as regular retail banks.

Some of the worst categories for retail banks were “competitiveness of interest rates,” down to a score of 71 from 73 last year, and “number and location of branches,” down to 76 from 79 last year.

Satisfaction with access to ATMs was down for both banks and credit unions, as institutions have been reducing the ranks as a result of cost cutting.

Feeling unsatisfied with your own banking relationship? You could take a cue from the results and go to a credit union, for a far better shot at happiness. Most people are eligible for membership to at least one.

But if you prefer a more traditional retail bank—or a leaner, high-interest-paying online bank—use MONEY’s bank matchmaker tool to find the best fit for you.

MONEY Banking

Why the Right Bank for You Might Not Be a Bank

Postage stamp printed in USA, dedicated to the 50th Anniversary of Credit Union Act.
Sergey Komarov-Kohl—Alamy

The best place to park your cash might be a credit union—a nonprofit financial cooperative that serves a select population.

MONEY recently released the results of its 2014 Best Banks survey, which awarded 11 banks honors for low fees, high interest rates and other customer-friendly policies. But it’s possible the best place for you to park your cash might not be on that list.

Rather than a bank, you may be better off with credit union—a nonprofit financial cooperative that serves a select population, like workers at a specific company or residents of a certain county.

Credit unions tend to offer better terms than banks. According to WalletHub, they pay an average 0.23% on $10,000 in savings—twice the average of banks in our study—and 73% offer free checking.

Also, credit unions are known for having more personal customer service, owing to the fact that they are owned by members and are often small (some have just one branch).

Because of their size and membership requirements, credit unions weren’t included in MONEY’s survey, but you can use these steps to find yourself a winner:

Look under rocks.

“We’re pretty sure everybody in the country is eligible to join at least one credit union—and probably several,” says Bill Hampel of the Credit Union National Association.

Start at asmarterchoice.org and nerdwallet.com/credit-union. Also check with your town, employer, alma mater, and religious institution. And ask family which ones they belong to.

Do a smell test.

Compare the yields to the averages at MONEY’s best midsize banks—at least 0.15% on checking and 0.56% on savings. (Online banks pay more but don’t offer the comparable personal attention.)

Also find out if the credit union has fee-free accounts, and if not, check the minimum-balance requirements to make sure you’d avoid a maintenance fee.

Get out the ruler.

Small credit unions often have just one branch. But about half belong to the CO-OP network, which offers you -access to more than 5,000 shared branches and almost 30,000 ATMs.

To avoid costly fees when you get cash, see if your best option has its own or partner ATMs near your home and work. If you’ll use teller service, make sure the branch is easily accessible.

Of course, CUNA reports that 88% of credit union members are offered mobile apps and 55% allow check deposits via smartphone—so you might not need a teller after all.

See MONEY’s 2014 list of the Best Banks in America

Try out MONEY’s Bank Matchmaker tool to find the best bank for you

MONEY mobile payments

This Is How Walmart Can Win Its War With Apple

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Frederic J. Brown—AFP/Getty Images

Retailers rejecting Apple Pay is just the latest salvo in a longstanding war between merchants and banks. Now the battle is coming to a head, pitting the world's biggest retailer against the world's most powerful tech company.

Corrected — 5:21 P.M.

When Apple Pay triumphantly launched last week, there was hope in the air. The service generally worked as advertised. The reviews were mostly positive. For a brief moment, it seemed, the emergence of phones-as-wallets would be one technology transition that happened smoothly.

But it’s never that simple; not with this much money on the line. Over the weekend, news broke that Rite Aid and CVS were dropping support for Apple’s payment system. An in-house memo, leaked by Slashgear, revealed the reason: The merchants plan to release their own mobile wallet next year. Until then, users of Apple Pay—or Google Wallet, or any other mobile payment service—would simply have to pay with plastic.

Apple Pay is not simply a fun new feature for your smartphone. It’s the most audible shot in a larger conflict that pits retailers against credit card companies and banks in a battle for the future of payment. Apple is just the most recent—and most visible—belligerent in this battle, and now the fight is finally spilling over into the mainstream.

What This Is Really All About

Doug McMillon, CEO of Walmart, is at war with credit cards. From his perspective, American Express, Visa, Mastercard, and the banks who issue their products are shaking his company down for billions each year. Whenever a customer swipes a credit card, part of that payment—between 1% and 3%—goes to the card’s issuer in what is known as an interchange or “swipe” fee. That means Walmart, and other major retailers, are losing serious money every time someone pulls out the plastic.

The retail giant has been fighting this situation for more than a decade. Back in 2003, Walmart was one of around 50 retailers to join an antitrust suit against Visa, Mastercard, and the banks that issue their cards, accusing them of conspiring to inflate credit-card fees above market rates. The card companies offered merchants $5.7 billion in compensation, as well other other concessions, but Walmart rejected the settlement in favor of filing separate lawsuits against individual companies.

It’s not hard to understand why Walmart turned down the deal. Depending on how many of the company’s customers are using credit cards, major retailers can spend billion of dollars in a single year on fees. That’s why, at the end of the day, Walmart felt that money alone could not make things right. “The settlement does nothing to reform the price-fixing payments system that has let credit card swipe fees skyrocket over the past decade and nothing to keep them from continuing to soar in the future,” explained Mallory Duncan, general counsel at the National Retail Federation, after his group (which includes Walmart) rejected the deal.

What merchants like Walmart really want is their own payment system — one that isn’t controlled by third-party financial companies who take whole percentage points of revenue for their services. So they decided to make one.

Wallet Wars

The retailers faced two challenges in trying to disrupt credit-card companies: One, getting a competing payment system into the hands of consumers; and two, creating a cheaper system to process those payments.

On the first count, companies like Starbucks have proven that consumers are willing to embrace proprietary wallet apps if they get deals in return. The coffee giant’s app, released in 2009, allows users to fill a virtual Starbucks card with money and then pay by scanning an advanced bar code called a QR code. Loyal customers are rewarded with free coffee. The Starbucks app now accounts for 11% of the company’s sales and over four million transactions a week. (Benjamin Vigier, the mastermind behind Starbucks’ application, joined Apple in 2010.)

While apps emerged as a good consumer-facing approach to a modern payment system, merchants were also hard at work developing behind-the-scenes payment-processing systems. Target’s REDcard looks like a normal debit card (it even offers cash back), but works only at Target stores and dodges traditional payment networks. “It’s a debit card in the sense that it’s debiting straight from a bank,” explains James Wester, research director of global payments at IDC, “but using different rails.”

Cheaper rails, that is. Target uses something called Automated Clearing House (ACH) to process REDcard transactions. Michael Archer, a global financial services expert at Kurt Salmon, estimates ACH transactions are one-tenth as expensive for retailers as credit cards, and a little less than half the cost of a normal debit card transaction. Multiply that times billions of transactions and it’s a lot of savings.

In 2012, a group of retailers led by Walmart decided to combine these two approaches and make a mobile wallet app that would work across all of their stores. The companies formed a group—Merchant Customer Exchange, or MCX for short—and set to work creating a product that would be as usable as credit cards and work over a cheaper payment network, just like REDcard, by connecting directly to a user’s checking account.

The result was CurrentC. The app, which is set to launch in the first half of 2015, works on iOS and Android phones and allows users to pay at participating retailers by scanning a code at checkout. CurrentC will automatically apply coupons and loyalty programs at the register, giving consumers an incentive to choose CurrentC over competing e-wallets.

Apple the Underdog?

Initial reviews of CurrentC are not flattering. TechCrunch called the service a “clunky attempt to kill Apple Pay and credit card fees” and complained that the system seems built for retailers, not consumers (which, after all, is true). Quartz mocked MCX merchants’ penchant for developing anti-consumer technology (like this comically long receipt) and others worried the app was a conspiracy to grab customer data.

Apple Pay supporters have a point. CurrentC is clunky—at least in its current beta state—and Apple Pay certainly wins on privacy by keeping all transaction data away from merchants. But as hard as it is for Walmart detractors to admit, CurrentC also also has some advantages over Apple Pay.

For one, the largest retailers in the country have hitched their horse firmly to the CurrentC bandwagon. Apply Pay may have some big names—such as Walgreens, Toys R Us, McDonalds, and of course, Apple itself—but MCX has more. CurrentC’s coalition includes Walmart, Target, K-Mart, 7-Eleven, Best Buy, Gap, Banana Republic, Dunkin’ Donuts, and a host of other major retailers from a diverse mix of industries. Together, the participating merchants process more than $1 trillion in payments every year.

This stable of retail powerhouses puts CurrentC in a powerful position. Are consumers going to boycott their favorite stores just because they’re asked to scan a code (or swipe a card) instead of wave their iPhone? Unlikely. Especially considering Apple Pay is limited to iPhone users only. The cross-platform CurrentC app may win fans simply because it’s available to millions more people, and works at more popular stores.

Second, Apple Pay isn’t especially appealing to retailers. The payment system costing merchants interchange fees every time it’s used and they don’t get any consumer data from purchases. The QR code technology that powers CurrentC is also less expensive than the NFC terminals required by Apple Pay, and many more stores already have QR readers installed.

Another problem with Apple Pay is that it’s not built to support merchant loyalty programs. “The real value of mobile wallets is merchants can put loyalty in them and get repeat business,” says Henry Helgeson, CEO of Merchant Warehouse, a company that provides point-of-sale technology for both platforms. (Helgeson predicts Apple will add loyalty features in the next version.)

“Apple Pay is a different form factor for the same things that have been plaguing [retailers] for decades,” says IDC’s Wester. “Other than getting a very vocal group of people who are loyal to Apple, I’m not sure a good value proposition has been shown to merchants yet.” CurrentC, meanwhile, has the potential to save the MCX coalition billions annually in processing fees.

Third, and perhaps most importantly, Apple Pay isn’t really a great deal for customers, either. Industry experts are skeptical the masses will adopt a mobile wallet that offers a slightly more convenient experience, and not much more. “‘Hey, I get to use a credit card on my phone’ is not a sufficient value proposition,” argues Archer, the financial services analyst. “Ongoing use requires a return of value. ‘Cool’ is good for one time. Probably not beyond that.”

The research backs him up. In a recent study by his firm, 61% of current mobile wallet users said rewards and loyalty programs are the primary reason they use their smartphone to make payments. CurrentC is built around these sorts of deals. Apple Pay decidedly is not.

Who Should We Root For?

Of course, neither side is really in it to help consumers. Apple is arguably in league with the banks and card companies, accepting a slice of each transaction as a reward for helping perpetuate the credit-card status quo. Meanwhile, Walmart is in this fight to lower its expenses, not make things cheaper for the average Joe.

However, despite MCX’s less-than-pure motivations, its wallet app is more likely to save customers money. Target’s REDcard offers 5% off all purchases as a reward for using a cheaper payment processor and giving Target information on what you buy. If CurrentC ultimately offers similar deals, consumers will be forced to choose between cool and cash — and many may ultimately opt for the latter.

One thing’s for sure: Neither side will go down without a fight.

Correction: A previous version of this article said Apple Pay did not support debit cards. In fact, some debit cards are supported.

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