Credit Unions are not-for-profit institutions owned by their members and operated to meet the financial needs of those who participate in them. They offer similar services to banks, including checking and savings accounts, credit cards, auto loans and mortgages, but also provide some other financial products that larger banks don’t usually offer.
Why should you choose a Credit Union?
While many consumers consider a bank or Credit Union based on what they value in the services they offer, there are several important factors to consider when making your choice. These include your budget, what kinds of products you need and whether a credit union will align with your personal banking needs.
One of the biggest differences between credit unions and banks is their profit status. Credit unions are not-for-profit, while banks are for-profit, which means that they make money by charging interest and account fees. In addition, banks must earn enough to cover their operations and pay their shareholders, while credit unions can reinvest the profits they earn back into the services they offer.
Rates & Fees
Because they are not-for-profit, credit unions are able to offer higher rates on deposits and lower fees than other financial institutions. They are also exempt from federal taxes, allowing them to pass along their savings to their members.
Loans & Deposits
Credit unions can offer a range of loans to their members, from unsecured ones to secured ones that are used for things like home improvement, furniture, or even car purchases. Most credit unions also offer savings and share certificates, as well as other types of financial products.
All of the member funds at federally chartered credit unions are insured up to $250,000 by the National Credit Union Administration, which is part of the U.S. Department of the Treasury.
In addition, most state-chartered credit unions are also federally insured. The NCUA is the regulatory body that oversees credit unions in the United States, and its website can help you verify whether a particular credit union is federally insured or not.
Most credit unions require that you be a member to open an account or apply for a loan. However, there are some exceptions to this rule, and you should check out the eligibility requirements for each credit union before deciding which one to go with.
Credit unions may offer fewer products than big banks, but they often have better rates and more ATM locations. Some credit unions also have a wider range of loan and deposit options than banks, including investment accounts, retirement planning, merchant services, and even some types of insurance policies.
Credit union branches tend to be smaller than those of banks, so you might have to travel a bit farther to access their services. This could be a drawback if you’re traveling frequently, or if you have special needs that require face-to-face contact with a credit union representative.
There are a lot of options out there, so it’s best to shop around and find a credit union that has what you need at the price you want. You should also take into consideration the service you’ll receive, how well the credit union’s products and services match your needs, and any fees or other charges that may be tacked on to the account or loan.