U.S. Postal Service Federal Credit Union Review

Is the U.S. Postal Service Federal Credit Union a good bank?

Woman drops of packages at post office
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The U.S. Postal Service Federal Credit Union (USPS FCU), which has been around since 1934, is a credit union explicitly designed for U.S. postal workers and their families and employees of select groups. The USPS FCU is different from most banks and financial institutions because they're member-owned and not-for-profit. As of 2020l, they serve around 24,781 members.

What We Like

  • Relatively high rates on savings accounts and CDs

  • Surcharge-free ATM access nationwide at CIRRUS, Allpoint, CULIANCE, ACCEL, and CO-OP Network locations

  • Discounts on car purchases

What We Don't Like

  • Only 6 branch locations (Raleigh, Greater Los Angeles, Pittsburgh, and 3 in the D.C. area)

  • No business banking options

  • Accounts can't be opened online

Who Is USPS FCU Best For?

USPS FCU should appeal to eligible customers who want lower interest rates on loans and higher yields on investments. It may be a particularly good fit for customers who want to:

  • Earn a competitive APY on CD accounts
  • Open a checking account with no minimum balance requirement
  • Enjoy surcharge-free ATM access nationwide
  • Have 24-hour online banking access
  • Consolidate student loans
  • Earn cash rewards when buying a home

What Does USPS FCU Offer?

USPS FCU offers a wide range of financial services for both everyday use and long-term savings.

Checking Accounts

There are three checking accounts to choose from at USPS Federal Credit Union:

  • Access Checking
  • Interest Checking
  • Money Market Checking

Access Checking is a basic checking account; Interest Checking pays dividends on deposits; and Money Market Checking combines the benefits of saving and checking into one account. Here's a side-by-side comparison of each account's features:

Checking Accounts
Access Interest Money Market
No monthly balance requirement No monthly service charges on average monthly balances of $250; accounts that average less than $250 are subject to a $5 monthly fee $2,000 daily minimum balance required
No minimum deposit to open No minimum balance requirement for members under age 24 and over age 59 $10 monthly service fee if the minimum balance requirement isn't met
Unlimited check-writing and 50 free initial checks 0.05% APY (0.10% for Relationship Rewards members) 0.10% APY (0.15% for Relationship Rewards members)

Interest and Money Market Checking both offer a slightly higher APY for Relationship Rewards members. To qualify for the Relationship Rewards program, members must have one of the following:

  • A qualifying direct deposit of $1,500 or more into a checking account with a debit card and enrollment in online banking
  • Loan balances totaling $25,000 or more
  • Deposit balances totaling $25,000 or more
  • First mortgage loan with the Credit Union Mortgage Association

In addition to an APY bump, Relationship Rewards members also enjoy other benefits including:

  • 1% rate discount on vehicle and signature loans
  • Bonus dividends on share savings, IRAs and money market savings accounts
  • $1,000 credit on home equity loan closing costs
  • $500 credit on first mortgage closing costs
  • Free shared branch transactions—which allows members to conduct business with USPS FCU at any Credit Union that's part of the network
  • No fees on foreign ATMs

Qualification for the Relationship Rewards program is determined monthly.

Savings Accounts

USPS FCU offers three savings accounts:

  • Club Accounts
  • Regular Share Savings
  • Money Market Savings Accounts

Club Accounts are designed for savers who have a specific goal. For example, you can open an account to save for vacations, Christmas and holiday shopping, taxes, and special-purpose savings, such as a wedding, college, or home repairs. With a Club Account, you commit to saving a minimum amount weekly or biweekly.

You can add money to your account via direct deposit, payroll allotment, or at a branch, and it can be as little as $5 biweekly. These accounts earn a 0.05% APY and require a $250 minimum balance. The credit union also offers club account options for kids. Because you're saving for a special purpose, there is a set disbursement date from these accounts:

  • Vacation Club Account: Mid-May
  • Christmas Club Account: Early December
  • Tax Club Account: Mid-March
  • Special Purpose Account: Withdrawn upon request

You may be charged a $10 fee for making an early withdrawal.

A Regular Share Account is required for membership in USPS Federal Credit Union. There's a $10 minimum deposit—$5 goes into your account; $5 covers your membership fee. The Money Market Savings Account allows you to earn interest on savings and write up to three checks per month on the account. You'll need at least a $5,000 minimum balance to earn dividends with this account.

Rates for both Regular Share Savings and Money Market Savings Accounts are tiered by balance.

Savings Accounts
Account Type Minimum Balance to Earn APY APY
Regular Share Savings $250 0.05%
  $2,000.01 0.05%
  $10,000.01 0.05%
     
Money Market Savings $5,000 0.20%
  $10,000 0.25%
  $25,000 0.45%
  $50,000 0.45%
  $75,000 0.45%
  $100,000 0.45%

Share Certificate Accounts

Certificate Accounts are the equivalent of CD accounts. USPS FCU Certificate Accounts have:

  • Terms ranging from 1 to 5 years
  • $250 minimum deposit
  • Guaranteed rates for the certificate term
  • Interest that compounds daily and credits quarterly

There are four types of certificates to choose from:

  • Share Certificates
  • Starter Certificates
  • Young Saver's Certificates
  • e-Certificates (offered through the credit union's online banking portal)

Here's how the APYs compare for each type of CD:

Certificate Accounts
Account Type Certificate Term APY
Share Certificate 12 months 0.75%
  24 months 1.00%
  36 months 1.25%
  60 months 1.45%
     
Starter Certificate ($1 minimum balance; $1,000 maximum) 12 months 1.25%
     
Young Saver's Certificate ($1 minimum balance; $3,000 maximum) 12 months 1.25%
  36 months 2.00%
     
e-Certificate 12 months 0.75%
  24 months 1.00%
  MISCA (24 months) 1.35%
  36 months 1.50%
  60 months 1.70%
  6-month add-on 0.75%

The Monthly Income Share Certificate is a special type of certificate account designed to provide savers with monthly income. It requires a $10,000 minimum balance.

Withdrawing money from a share certificate account prior to the maturity date may trigger a penalty which could detract from interest earnings.

Individual Retirement Accounts

USPS FCU gives you two ways to save for retirement: IRA Savings Accounts (both traditional and Roth) and IRA Share Certificates. As of 2020, the contribution limits for traditional and Roth IRA Savings Accounts is $6,000, or $7,000 if you're over age 50. Below is a comparison of them:

Traditional vs. Roth IRA
  Traditional Roth
Contributions Tax-deductible After-tax
Withdrawals Penalty-free for higher education or first home purchase Penalty-free after 5 years
Required Minimum Distribution Age 70 ½ N/A

IRA Share Certificates, which have a $250 minimum balance, offer the same tax advantages as an IRA Savings Account, with potentially higher yields over fixed terms from 1 to 5 years. Here are their term lengths and respective APYs:

  • 12 months: 0.75%
  • 24 months: 1.00%
  • 36 months: 1.25%
  • 60 months: 1.45%

You can also open one of these certificate accounts as a Coverdell Education Savings Account. With this type of account, you can save for your child's education expenses on a tax-deferred basis until they're 18 years old. You can contribute up to $2,000 annually, and withdrawals are tax-free if used for qualified higher education expenses. If not used for education, funds must be withdrawn by the child's 30th birthday to avoid a tax penalty.

Roth IRA and Coverdell ESA eligibility are based on your adjusted gross income.

Money Market

USPS FCU's money market account lets you have full access to your money while you earn higher dividend rates than traditional savings accounts at megabanks.

  • $5,000 minimum balance
  • 0.50% APY
  • 0.50% dividend

Dividends are calculated from the day of deposit and paid out monthly. The account also allows for six withdrawals or transfers each month—three of which can be made by MMSA checks.

Credit Cards

USPS FCU offers three credit card options:

  • VISA Platinum Reward: One point per $1 spent
  • VISA Platinum: Lower rates
  • VISA Secured: Useful for building or repairing credit

All three cards offer a 0% introductory APR for the first 12 billing cycles, with rates as low as 7.99% for the Platinum and Secured and 8.90% for the Platinum Rewards. Here are some perks of the cards:

  • No annual fee
  • No foreign transaction fees
  • No minimum finance charges
  • 25-day grace period on purchases
  • Cell phone protection
  • Baggage delay insurance
  • Roadside dispatch
  • Travel and emergency services

Other Financial Products From USPS FCU

USPS FCU also offers a large selection of other offerings:

  • Mortgage loans
  • Home equity loans
  • Vehicle loans
  • Personal loans
  • Education loans
  • Student loan consolidation
  • IRAs

USPS FCU's Customer Service

USPS FCU doesn't offer a customer service option like online chat abilities, but phone banking is available by calling (800) 877-7328, or (301) 856-5000 if you're in the Maryland, D.C., or Virginia area. You can access the system 24/7. Customers may not particularly like that you can't open an account online, but that's the primary inconvenience. The mobile app is basic compared to larger banks, but it covers most of the necessities people could need.

How to Bank With USPS FCU

The first step to opening an account with USPS FCU is determining if you're eligible for membership. You can join if:

  • You're an employee or retiree of the U.S. Postal Service
  • You're a family member of a USPS FCU member
  • You're an employee of a Select Group

Non-USPS employers looking to offer their employees the benefits of a Credit Union may request to become a sponsor by submitting a brief letter to USPS FCU. Those granted sponsorship become apart of the bank's Select Group Membership program and enjoy the same benefits as USPS employees. To be eligible, the organization must: 

  • Be within 50 miles of the USPS FCU main office or one of its branches
  • Have at least 25 employees
  • Have been in business at least three years
  • Offer Direct Deposit or Payroll Allotment

To open a checking, savings, or share account, you'll need to visit a branch location. If there isn't a location within reasonable distance of you, you can fill out a new account application and mail or fax it to (301) 856-4061. Like any financial institution, you'll need to provide personal information and proof of eligibility when opening an account.

The Bottom Line

BENEFITS

Some of the best features of the USPS FCU include the competitive rates offered on certificate accounts and the low APRs associated with loan products. Select Group membership also allows a larger group of people—beyond postal employees and their families—to join the credit union. Overall, it offers a solid selection of account types to cover virtually every personal banking need. These perks are enhanced by additional benefits like financial education and counseling, investment services, car buying assistance, and cash rewards for home buyers.

DRAWBACKS

The limited branch availability is a downside, but shared branch banking does make up for it to a degree. The fact that you have to visit a branch to open an account could make it an inconvenient choice for someone who doesn't live near a branch location. Also, if you want to save but don't want to commit to a certificate account, the rates on savings and money market accounts are less competitive than other credit unions and banks.

Article Sources

  1. U.S. Postal Service Federal Credit Union. "About Us." Accessed May 6, 2020.

  2. U.S. Postal Service Federal Credit Union. "Checking & Savings Accounts." Accessed May 6, 2020.

  3. U.S. Postal Service Federal Credit Union. "Checking Accounts." Accessed May 6, 2020.

  4. U.S. Postal Service Federal Credit Union. "Shared Branching." Accessed May 11, 2020.

  5. U.S. Postal Service Federal Credit Union. "Relationship Rewards." Accessed May 6, 2020.

  6. U.S. Postal Service Federal Credit Union. "Savings Accounts." Accessed May 6, 2020.

  7. U.S. Postal Service Federal Credit Union. "Savings Rates." Accessed May 6, 2020.

  8. IRS. "IRA FAQs - Contributions." Accessed May 6, 2020.

  9. U.S. Postal Service Federal Credit Union. "Coverdell Education Account." Accessed May 6, 2020.

  10. U.S. Postal Service Federal Credit Union. "Money Market Savings." Accessed May 6, 2020.

  11. U.S. Postal Service Federal Credit Union. "Credit Cards." Accessed May 6, 2020.

  12. U.S. Postal Service Federal Credit Union. "Contact Us." Accessed May 6, 2020.

  13. U.S. Postal Service Federal Credit Union. "Become a Member of the USPS FCU." Accessed May 6, 2020.