As an individual, you can choose to manage your finances with a traditional bank, or an online bank, depending on which you’re comfortable with. Other options are available through, for example, you could choose to do so with a credit union. As much as credit unions are not as famous as traditional banks or online banks, they all offer the same finance services in one way or the other. So what exactly is a credit union all about?
A credit union is a financial cooperative organization created, owned and controlled by its participating members. It is a non-profit organization. Credit unions offer many of the same products and services as banks, but because they are cooperatives, they can return profits to their members in the form of lower rates on loans and higher rates on deposits.
To become a member of a credit union, you must meet certain eligibility requirements, such as living or working in a specific geographic area or belonging to a specific group, such as employees of a certain company.
Benefits of Credit Union
Credit unions are non-profit-oriented organizations that are owned and controlled by their participating members. This means that any profits gained are returned to its members in different forms such as loans at lower rates, or savings at high-interest rates.
Credit Union’s key benefits are:
- Decreased Loan Interest Rates
Credit unions can help you save more money when your loan due to their low/reduced interest rates offered on loans as compared to traditional or online banks
- Increased Interest Rates on Savings
Credit unions can also help your savings grow faster due to the high-interest rates offered on savings as compared to traditional or online banks.
- No Fees for Checking Accounts
Many credit unions do not charge fees for checking accounts, which can save you a lot of money over time.
- Personalized Service
Credit unions typically offer more personalized service than traditional banks, with more attention paid to each member.
- Community involvement
Credit unions are often involved in their local communities, supporting charitable causes and promoting financial literacy education.
Disadvantages of Credit Unions
Well, the first and basic disadvantage of credit unions is that they are not as famous as traditional or online banks. Therefore, it may be a little more difficult to find one if you don’t live near a city. Additionally, their hours may be more limited than a bank’s hours.
Credit unions also have stricter membership requirements than banks. For example, you may have to be employed by a certain company or live in a certain area to join.
How Do I Join a Credit Unions?
Credit unions are non-profit-oriented organizations that are owned and controlled by their participating members. This means that you, the member, have a say in how the credit union is run, and you’re eligible for some excellent benefits, like lower interest rates on loans and higher interest rates on deposits.
The process of joining a credit union is quite simple, you can apply online, or speak to a representative in person at a branch located close to you. You can also join without having to submit multiple documents or identify proofs. So if you’re interested in joining a credit union, head over to the Credit Union National Association website and find one that’s right for you.
Finding the Best Credit Unions
To find the Best Credit Union for you, follow these simple steps:
- Look for a credit union that’s close to home or work so you can access their services and your account easily.
- Ensure that the credit union is duly insured by the National Credit Union Administration (NCUA). This will protect your deposits in case the credit union goes out of business.
- Compare interest rates, fees, and other services offered by different credit unions and select the best one that suits your needs.
- Seek recommendations and reviews on credit unions from friends, family and loved ones. They may have memberships with institutions that offer great rates and services.
What Should I Do if I’m Not Happy With My Credit Union?
If you’re unhappy with your credit union, the best thing to do is talk to them. Inform them of your displeasure with their services or policy and see if they can improve or render help. If they can’t or if you’re still not satisfied, you can always switch to another credit union. But before deciding on any credit union, Compare interest rates, fees, and other services offered by different credit unions and select the best one that suits your needs.
Differences Between a Credit Union and Traditional Bank
Credit unions are non-profit-based organizations that are owned and controlled by their participating members. Unlike traditional banks that are profit-oriented credit unions’ major goal is to satisfy its members’ financial needs and not to make a profit.
Credit unions are quite smaller in size compared to traditional banks. As much as this might seem like a drawback, has an added advantage, credit unions can offer their members more individual services and products tailored to their members’ financial needs (like car loans and mortgages, both of which traditional banks don’t provide). Credit unions also offer low loan interest rates and fees, as well as high savings interest rates compared to traditional banks.
Conclusion
Credit unions are non-profit centered organizations that are owned and controlled by their participating members. This means that profits are returned to its members in different forms, such as loans at lower rates, or savings at high-interest rates. This also means that you, the member, have a say in how the credit union is run, and are eligible for some pretty excellent benefits, like lower interest rates on loans and higher interest rates on deposits.
