In part 3, I shared my experiences with my physical visit to Desert Schools Federal Credit Union. I ended just when I was about to talk about their Health Savings Account. As both Desert Schools and Arizona Federal Credit Union offer this package, I thought I’d size up the two choices on this note, follow it with my review of Arizona Federal, then see if you would choose the same one I will.

Health Savings Account. These types of accounts came into effect under George Bush II, in what I see as an ineffective attempt to control health costs. The way it works is if you self-insure (a lot of small businesses, for example, get their own insurance), you can open a Health Savings Account. By doing this, you’re in insurance rates are lower, your deductibles are higher, but you’re allowed to open a savings account that earns money tax-free. When you spend money on your healthcare out of that account, you get to deduct it on your taxes. If you are self-insured under the Health Savings Plan, you have to have a Health Savings Account to go with it.

With the national banks, you can’t toggle from your online account over to your health savings account, without going through a third-party “firewall” of sorts, a completely different site where you must login from there. They keep the Health Savings Account very separate from your other accounts.

At both of these credit unions, your Health Savings Accounts are integrated. This makes it so much easier. Part of the reason for having health savings account, is that you want to be putting money aside every month into the account. Because the credit unions make that easier to do, I’m much more likely to set aside money for that purpose. Any financial advisor will tell you that you need to be socking away money every month that goes somewhere that you don’t touch specifically for the kind of health emergencies one doesn’t anticipate.

For Desert Schools Federal Credit Union’s local investment, they were good. They had a nice long list of groups they give money to that are Arizona-based. That’s very good. For example, they support United Way and BALST School District (one of the underprivileged school districts where we need to get kids into a better situation).

Arizona Central Credit Union

They have 50 valley locations. I went to the branch on Central Avenue and Palm Lane. They do have a drive-up ATM there, but no teller window. I didn’t get a chance to look at their online demo, because, like Desert Schools, they don’t have one– and because no one offered me a peek at their own personal account. Of course, I didn’t ask. I did ask if they had an online demo and they said, “No. For one, we just updated our system, but also, nobody ever really asks about that.”

Bill pay for them is not always free. I don’t remember the conditions under which that’s the case, but I think it’s related to account balances. For security, they use Alert Me Credit Monitoring Service.

I was less impressed with their customer service. My hold time on the phone, just waiting for someone to pick up at the branch, was 15 minutes. The next day, I physically went into the branch, not so much because I was ready to do that, but because I didn’t get anywhere on the phone. So I walked into the Arizona Central Credit Union (ACCU), kind of just waited around for a while, and then someone said, “If you just have a seat over there somewhere, someone will be over to help you.” It felt to me like they didn’t really care that I was there.

That’s two red flags. One on the phone. One in person. If it weren’t for the fact that I was also planning to write this post, I’d have bailed on Arizona Central Credit Union right there. If I were to treat my perspective clients like that, I’d never sell any homes. I expect the same level of service from people who want to hold on to my money.

Again, from the perspective of the small business (and the biggest selling point that credit unions should have over mega-banks), I’m making this shift for the personal touches of knowing consistently who I’m talking with at the bank. ACCU failed on this point.

Their personal accounts were pretty much the same as Desert Schools Federal Credit Union. I was not impressed by what had to be done in order to get free checking, though. Their minimum balances seemed really high to me. It just bugs the Dickens out of me that people want to hold on to my money (to earn interest on it) and they’re still charging me fees. Their fee structure for business accounts was a minimum of $1500. This was the same at Desert Schools. Nothing significant was different in the way they structure savings accounts as well. They also have the Health Savings Account, with no monthly fees, and it’s integrated into their website. Local Investment for them was also a healthy list. One of them was International Rescue Committee, which I like.

The last thing I want to review for Desert Schools and Arizona Federal Credit Union, before I make a decision between the the two, is Brokerage Accounts. That’s the first thing I’ll talk about in the next installment of my six-part series on the process of selecting a credit union. Until then!

Welcome to part 3 of my investigation into the wisdom and practicality of making the switch to credit unions from my current national bank at JPWellsComeriBank.

In part 2, I narrowed it down from 10 to two Credit Unions worth serious consideration:

Desert Schools Federal Credit Union and Arizona Central Credit Union.

I’m starting with Desert Schools Federal Credit Union, but there is a significant amount of overlapping, so you’ll want to read this first one, first, or you’ll miss out on a good portion of both reviews.

Desert Schools Federal Credit Union

They have 56 valley locations. I went to the one on Missouri and 7th Street, by the Buffalo Exchange. They were very nice. I asked if they had a demo of their online system. They did not have one. A woman at another desk said, “You can look at my account”. I was surprised that she was willing to share her personal information and resisted at first, but I saw that it works about the same as the accounts at my current national bank, though it’s not as pretty or intuitive. JPWellsComeriBank spends a lot more money on their customer website account interface.

Both Desert Schools Federal Credit Union and Arizona Central Credit Union have mobile apps, but neither of them have the app feature where you can take a picture of your check and deposit it through your phone. Now, that’s not something I need at present, but it’s worth knowing. Because as soon as they do come out with that feature, you better believe I’ll take advantage of it, especially given the small number of physical locations compared to the larger, national banks.

Bill Pay, for all of their different checking account types, except for one that is set up for kids, is always free with Desert Schools Federal Credit Union. I was impressed with that. You can also see copies of your checks for free. The national banks charge for that. This credit union also interfaces with Quicken.

This part is the most important for a small business like mine, and in fact, it was one of the reasons I hesitated moving away from the megabank I’ve been with. In the end, I’ve seen that I really had nothing to worry about. I’m sure the megabanks are happy to feed the fear that credit unions won’t be able to provide the same on-line services.

Withdrawals from non-credit union banks are free for the first four and $2 after that. But there is a workaround to those non-specific-institution charges; one that is often utilized by people, but never openly promoted (and for obvious reasons): make a cash withdrawal when making a purchase at a supermarket. This method also suggests a way around any maximum per day ATM withdrawal amount.

For security on their credit/debit cards, they use Visa Fraud Monitoring. That seems pretty good to me. The woman I spoke with at the bank said that Desert Schools Federal Credit Union has never had their information hacked or stolen.

Regarding their customer service:  when I first walked into the bank, I was greeted after a couple of minutes and the woman who assisted me was very helpful. I didn’t tell her that I was preparing to write this blog post, but she was very surprised at the number of questions I asked.

What I noticed at both of these credit unions, if you wanted to have both free checking and a minimum balance, they required you to do a certain number of credit charges. What they mean by “credit charges” is that they require a certain number of charges to be run as credit, as opposed to running them as debit. I thought that was really interesting. I had never seen that before. I later talked to a local merchant who explained that banks get a higer percentage per charge if it’s run as credit, as apposed to debit. In the end, it doesn’t really matter to me whether I sign for it as a “credit” charge or use my pin as a “debit”. The money comes out of my account the same way.

$7 dollars a month is what you pay for their personal checking account, unless you have a balance over $1500, in which case it’s free. With both credit unions, you must have a savings account (with a minimum $25 balance) along with your checking account. This is their gateway to becoming a member of the credit union. That makes sense, because then you have voting rights as a member (remember, Credit Unions are, by definition, member-based institutions). Also, both credit unions do not require automatic savings withdrawals every month, unlike the national banks all do. This is great.

In next week’s post, I’ll cover Health Savings Accounts at Desert Schools Federal Credit Union and share my experiences at Arizona Federal Credit Union. I’ll then chose one and see if you can figure out why I chose it.

To see the next installment, click here.