Episode 16 === Matt: Welcome back to quest exploration. This is quest federal credit unions podcast regarding all things quest related. I am Matt Jennings. One of your co-hosts joined today by my other co-host and partner in crime. Brian sprang. Brian, how are you? Brian: Good. I'm doing well. How about you? Matt: I'm good. Thank you very much. I'm good. I'm excited today. We've got a new guest that we haven't had with us before. He's one of our office VPs, and we're going to talk about a whole bunch of different deposit type accounts that we offer, what they mean, how they operate and function. And so Jordan, if you're ready, we'll dive right in. All right. Jordan temple have at it. Tell us a little bit about yourself, where you're at what office you're located at that, kind of thing. Jordan: My name's Jordan temple. I am branch manager of the Jacob parrot office here in town. Been with the credit union a little over five years. Matt: Very good. Well, we welcome you to the show. We try to keep this light and easy as everyone knows. If you've been listening, Brian and I are pretty good at, you know, 20 minutes ish about, you know, keep it easy, keep it light answer some questions you may have. If there's any questions that come up. That you may have after the show, don't hesitate to reach out to Jordan, myself, Brian, anyone at quest, and we can help you with the answers and Brian, I'll throw some show notes up as well with helpful links and attachments. Anything that we we discussed today, you can just reference in the show notes. So Jordan, you're kind of like our resident expert on. Deposits and ACH is which we can talk about another time and things like that. But talk to us about, I mean, everyone knows what a savings account is. That's a pretty basic thing. Everyone knows what a checking account is and that we have a checking and then we have an interest bearing checking account. But what other types of deposit accounts do we offer? And then we can dive into like how useful they are, what you can use them for that, that type of thing. Jordan: Yeah. We offer a, anything from just a secondary savings to transactional accounts can have up to two checking accounts on one account, one membership money markets, which are tiered several other accounts. You can just pull out your money. That's not secured like a certificate or a CD. Matt: Okay. So let's talk about that. I guess the first thing you mentioned was the tiering. And when you talk about tiering, just explain that a little bit and what that means for people. Jordan: Yeah. Tiering on like the money market it's based on the dollar amount you have in a money market. You need to have at least $500 to gain any interest income throughout the month. It's tiered on different platforms as far as. There's three different tiers on that. The more money you have in each tier has a little higher rate of return on your interest. Matt: Very good. Very good. And I know that works the same way for certificates and other savings or checking. Correct? Jordan: That's correct. Certificates are tiered as well. Higher rate of return, the more you have in a certificate. Matt: Right, right now when we're talking about a money market or a certificate of deposit, I mean, they're both a higher yielding or meaning they pay a higher rate of return than just a regular savings account would, but what's the difference between a certificate of deposit versus a money market and how they function Jordan: Certificate of deposit is usually termed out six months up to five years. You cannot withdraw any of those funds. You do have the ability to withdraw the interest that has accumulated on that certificate. A money market. It is tiered as well. You get your dividends paid monthly. You have the ability to do one withdrawal per month. Without any penalty, you can do multiple withdrawals above that. There is a little. Penalty as far as those withdrawals come. Matt: Okay. So if I have, let's say, you know, $5,000 in a money market and I need to just come in because my hot water heater blew up and and get a thousand bucks to buy a new hot water heater and pay someone to put it in my house. For me, you can come in and withdrawal that out kind of a rainy day emergency fund one time in that month. And it doesn't cost a thing. Jordan: Yes, absolutely. You can withdraw as much as you want. Out of that money market once a month without a penalty. Matt: Okay. And if someone's using that as a, as a savings vehicle where you know, they're putting aside money for a home improvement or even a kid's college education or something like that, as long as they think ahead, And say, well, I may need a little bit more than that this month that I want to take out of there. They can still just do it all in one shot and not have any kind of fee or penalty. Jordan: Yeah. That is correct. And you can deposit money into a money market as many times as you'd like throughout the month as well. No penalties at all. Matt: Okay. Brian: While we're talking about fees and penalties you mentioned something earlier when you were describing money market. What happens if my balance falls below $500 in that account? Am I going to get dinged with any sort of fee or anything Jordan: because of that? No, there is no fees. If you were below the 500, you will just not acquire any interest that month until you have a balance above 500 a year. Brian: Okay. Thank you. Matt: Okay. And then certificates of deposit. They're a little more strict. I mean, it just sounds more strict certificate of deposit versus money market. So explain that a little bit. How the mechanism of a certificate and what you're committing to, I guess, is the best way to say it. Jordan: Certificate of deposit. You're usually going to pick whatever term you want. I said six months, usually up to five years, those funds you can not pull out. If you do pull them out, you will have a. Interest penalty, usually, depending on how long that certificate is, right. There will be an interest penalty between 30, 60, or 90 day interest penalty that you will have to pay. You can still keep this certificate open and in place, but yes, if you're going to do an interest withdrawal or a withdrawal on that certificate, yes, there will be penalties on that. Matt: Okay. All right. Now this is a question that no, one's really comfortable asking, but I know how we handle it. And I think it's a, you know, not necessarily a marketing tool, but it's just a. Fair thing to do, but let's assume someone has a certificate of deposit and it does have those restrictions where, you know, you committed to leave the money for let's say three years. And then that member becomes deceased when they're heirs and or spouse, whatever that looks like takes control of that money. We don't charge any, any penalty or interest fee for that. Jordan: No, we've always released the funds to whatever beneficiary listed or joint owner on that account. We've always waved the penalty. For that person, so, Matt: Right, right. And I think that's only a fair way to do it. You know, someone maybe has best intentions of earning a little higher rate by investing in that CD for three or five years. But then unfortunately they pass and it's, you know, really not the fault of their heir, nor do we want to put that burden on them. You know, if something were to happen to a loved one and just, Hey, it's your money and here you go. Yep. Certainly. Yeah. Very good. Very good. So you mentioned that money markets, CDs, really all of our deposit accounts pay interest on a monthly basis, correct? Jordan: Correct. Matt: Okay. And, and I know you know, that's different. Not all, but some other financial institutions, because a lot pay on a quarterly basis. So when you think about compounding interest, how big of a deal is it that we pay you monthly versus Jordan: It's a really big deal because you're getting paid on a, you're getting your interest every month in that a dollar amount in your certificate is going up every month. So therefore you're making a little more interest on a higher dollar amount monthly. So it does add up, especially over the course of a year or five years. You're definitely going to get a little more interest, getting that a dividend paid monthly. Matt: Right, right. We made that change gosh, probably 15 years ago, I'm guessing from a quarterly to a monthly one. It helps us from a budget perspective because we know exactly what we're paying out each month in dividends and kind of levels our budget out. But it's also just a huge benefit to the member because they're earning interest on their interests. Making money off of money that they just made. You can't beat that. That's a pretty good deal. Jordan: It's never a bad thing. Matt: Right, right. Okay. So someone wants to get a money market or a certificate of deposit. Did they have to call, you Jordan: No, they can come in and talk to any of the ladies at the front line, the tellers, and they can set one of those up for you right then and there it takes all of about five to 10 minutes. If you have a membership already established. Matt: Right. Brian: Can you do that at any branch or just specific branches? Jordan: You can do that at any branch. Matt: Excellent. Brian, this is maybe a question for you. Can you open one of those online? Brian: Yes, I think you can. Let me get that in the show notes and I'll let you know. I know there is a feature that says, says that you can open a... I think you can, maybe start the process, but you will have to finish the process in the branch. Matt: Okay Brian: I'll find out and let you know, Matt: Please. Thank you. I didn't mean to, to throw you a zinger that just came to mind. So so we've talked about money markets and certificates. You can come in really to any, to any Frontline's member service representative and or office VP and get those open now. And, and Jordan, you had mentioned if you've already got a membership, it takes minutes. It's it's no big deal. That's correct. We'll we do that over the telephone with people Jordan: If you're able to verify, they will still need to come in and set everything up with the transfer with their account. Yes. But yes, they can get that set as long as we can verify the member and they can come in at a later date and get everything squared away, then Matt: So at least get it started. Yes. If need be. Okay. Very good. So the the other question, I guess, that I would have about that is. Member comes in. They, they want to talk about a CD or a money market. And none of us here are like series six, investment brokers or advisors or anything like that. But we're pretty comfortable talking to people about you know, what's the benefit of one or the other. So say you have someone that comes in and they say, well, we know we're not going to use, you know, we've got X amount of dollars and we're not going to use Y for at least two. But this other part, you know, we may want to be able to get to that, to do a home improvement project or to, you know, buy a good used work car or something like that. Can we do a combination of any of the above? Jordan: Yeah. You can have a, a certificate, multiple certificates or a money market, both all in one account. Like I said, if you're looking to kind of put the money back, you know, you're not going to need it for a couple of years, certificate would probably get you your higher. As far as needing the money for any emergencies that come up a money market is definitely going to be your better option. That way you will not have to pay any penalties or whatnot at time of withdrawal. Excellent. Matt: Excellent. So I know we get those questions a lot and, you know folks lean on us or at least trust us to say, Hey, I've got this money. And what's the best way to go about it. And, and I always advise people, you know, take a look at your statement every month and you're going to see this money market and see. On that same exact statement, correct? Correct. Yeah. So take a good look at that. And if you've got a bunch of money laying in a checking account, that's earning, you nothing, It's really one, it's not terribly safe. If someone were to get ahold of your checkbook or a debit card or something like that, but why not take advantage of a money market where you could say, all right, I've got $4,000 in this checking, but I really only use 1500 or so per month to pay my bills and stuff. Why not go ahead and put a couple thousand over in a money market. And if you need it, it's there and you can get it without penalty. But at least you're getting. Greater return for your, for your investment, Jordan: Yeah, correct. I mean, at least your money is making a little money for you and you do have the ability to withdraw that at any time, if you need. Matt: Right. Exactly. And Brian, I'm going to, I positive, I know the answer to this, not on a CD, but on a money market. I've got X amount in my checkbook. I've got X amount in my money market, but I need to move some over. Right. I can do that online. Brian: Yes. Absolutely right. Yes. And I actually found the answer to your question from a few minutes ago, Matt, the answer is yes for both money markets, as well as certificates of deposit. You can, as long as the money has already been deposited into your quest account. So if it's sitting there in savings or checking, then you can make that transfer. Assign beneficiaries and open both certificates of deposit as well as money markets. If the money is new money coming into the credit union on deposit, then you would have to do that at a branch to make that deposit, but then they would facilitate starting the opening that CD or, or other account for money market or even IRA purposes. Matt: Okay, excellent. So you brought up a good point when you set assigned beneficiaries, Jordan you know, you do a lot of these explain to us a little bit. Someone comes in and they start a money market, or they open a CD or multiple CDs and they want to assign. A beneficiary or multiple beneficiaries, you know, I, I know we have people that will have individual CBS maybe with their grandkids, you know, individual grandkids. Is it different beneficiaries? How does that process work? Yeah, Jordan: you can assign as many beneficiaries as you would like to one account all your accounts, different accounts. Those are all NCA insured, federally insured up to 250,000 per beneficiary listed on the account that has a certificate. Checking money market, anything on the account up to $250,000, it is insured per beneficiary listed. Matt: Okay. Well that kind of answers all of my questions about money markets and CDs, anything we missed? Jordan: I don't think I have anything. Okay. Matt: Any questions Brian: That covers everything that I was thinking about and good to get the answers for the online banking aspect of it too. So any of our online members will be able to take advantage of that right away. Matt: Very Good. Good. So you know, we talk about everyone knows savings and everyone knows check. But in the credit union world, especially on the backside, meaning on the other side of the frontline, they're actually called shares, you know, it's, you have your $5 minimum deposit and an that's your quote unquote share in the credit union. So we call your savings account, a transactional share account, or a share account, or a share draft account, meaning checking. What other shares do we offer Jordan? Beyond just your standard. Share draft, or we say checking and savings because it's what most, everyone commonly knows it as, but aside from money market money or CDs and your regular old savings accounts, what else do we offer? Jordan: Oh, we have a couple of different types of Christmas club accounts that gain a little higher rate of return of interest on that. We have vacation accounts. Just a couple of other accounts like that for special interest and special purposes, we have two Christmas club accounts, one pays a little higher interest. That one you can only withdrawal once a year before Christmas time. If you withdraw early, there is a little penalty to that. Another one's just a strict Christmas club. You can withdraw on the deposits as many times as you'd like per month to the. Matt: Okay. So really we can, we can open a share or a sub savings account. Let's call it for just about any purpose that someone has, Jordan: correct. Matt: Yeah. And they can use it however they see fit. If they want to, you know, save up for, they know, like you said, taking a vacation or they know that they've got maybe an anniversary and they want to set aside some money. We can segregate and you can have a slew of those underneath that same account number, correct? Jordan: Absolutely. Matt: Yeah. Yeah. Okay. And I think it's kind of cool too, that frontline staff, really, anyone can go in and nickname that share so you can call it. And then when you see it on your online banking or your statement it'll will literally say like anniversary account or, you know, wedding fund. Whatever you, however you want to label that. So you can use any of those shares for just about anything that you want to do. Do we offer like a sub share for people that say they want to set aside you know, weekly or biweekly out of a paycheck? Can they, can they have us, or can they through online banking, set it up to a, Hey, my paycheck hits. I want 50 bucks go into that savings. I want a hundred going to my checking now. $25 going into my Christmas club or my wedding fund. Jordan: Yeah, absolutely. You can set a distribution up either via online banking or with any of the frontline staff there to either be weekly bi-weekly monthly, a certain day of the month to have that distribution come off of your payroll or paycheck that comes in, go to another share account, whether it be vacation Christmas club, your anniversary account, or whatnot. Matt: So you can really break down your money as it comes in into any form and different denomination that you want and to any of those, and it just does it automatically for you. Jordan: Absolutely. Until you update it. Matt: All right, right. So great way to streamline a budget. Great way for you to you know, stop and take a look at home and say, Hey, if we're setting aside so much for the house so much for the car, so much for utilities so much for the kids, college education, whatever the case may be, you can have that done automatically for you. And, and it's just done. I mean, when, when that posts it's done, and then you can see that on your statement on your online banking. And it's just a great way to budget. If you're struggling with that, or you're trying to learn money management or if you're a little bit like me, you see some money in your savings account and you think there's something you might want to buy, but if you put it over here where you don't look at it, then you're a little less likely to make a foolish decision. Jordan: Yes, that's correct. Definitely in a very good budgeting tool. Yeah. Great. Brian: So Jordan for all these types of savings and or interest earning vehicles, where can members find out what our current rates are? Jordan: Our rates are all posted on our website. Or they can stop in any of the offices and get a rate sheet. Any of the frontline staff would be able to support. Present a rate sheet for them. Brian: Very good. Yep. We do a list certificate rates and we also list the share account rates separately. So you can easily go in there and check them out. And they're also available when you log in to online banking and you want to potentially open up that, that new account. You can see the current rates right there. So anytime they're updated, there'll be right there in front. Matt: All right. Very good. Well, what else are we missing about money markets, CDs and other shares, other accounts Jordan: we've covered that pretty much majority of it. We've about your beneficiaries. You are a federal insured through the NCUA. You do have the ability to deposit into those as many times as you want, or do a withdrawal from your payroll. Anytime it comes in. Matt: Okay. So you mentioned right in the beginning two checking accounts or share draft accounts as we would call it, but two different ones under the same account. And I know that's really common. A lot of people do that some thought process behind why people do it that way. Jordan: If you have two different checking accounts, you want to do some for bills and then some. Another expense or whatnot. We do offer interest bearing checkings and regular checking the interest bearing checking. If you have over $500 in there throughout the month, you will get a little interest kickback. At the end of the month, if you don't have $500, there is no penalties, no minimum balance in either one, but the non-interest bearing checking. You will not reach retain any interest at all throughout the month. Right. Matt: And you can have free debit card on either one of those as well. Jordan: That's correct. Free debit card. Matt: Awesome. Okay. Great. Well, Brian, do you have anything else? Brian: I do not; answered all my questions. Matt: Excellent. Well, Jordan, we appreciate you coming in today and we'll look forward to having you back soon. Again, we try to keep these short and sweet and that way we're not boring people to death, but if they're making a short commute or they just have to, they have a question about something like this after. They can pop on and listen for 15, 20 minutes and get their answers. So again, Brian's going to include some show notes and that way, if you have any questions, maybe those will answer what your questions may be. If not, do not hesitate to pick up the phone call any one of our offices. You can ask for Jordan, don't have to ask for Jordan, he is a one of, one of several experts in the area. So really just about anyone that answers the phone can help you with any questions that you have on this and get the process started for you. So thank you very much, Jordan. Thank you, Brian. Brian: You're welcome. Thank you. Matt: You're welcome. And we'll welcome everyone. Back to the next episode of quest exploration in the very new future.