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Learn more about credit unions to see if joining one is right for you.
As banks continue to increase their fees and reduce their services, many are looking for an alternative to conduct their financial business—and are turning to credit unions.
What is a credit union?
A credit union is a nonprofit institution owned by its members. Since there are no shareholders, a credit union can return its profit back to its members through lower fees and higher yields. They offer the same basic services as a traditional financial institution and have become increasingly easier to join—most are open to those who live in the community.
Credit union conveniences
You won’t find your credit union on every corner, but many have formed partnerships that enable you to conduct business at any member credit union anywhere in the nation—and sometimes beyond our borders. And credit unions with ATM cards are typically part of a nationwide network of machines located at convenience stores, drug stores and even some banks.
Advantages of a credit union
You’ll find better interest rates on credit cards, car loans and home equity lines of credit. And, while you may not get a better deal on a first mortgage at a credit union, you’ll likely have an easier time being approved and will pay lower closing costs.
Like all banks at the moment, you won’t earn much on your savings accounts with a credit union, but you’ll still likely earn more than you would at a bank. And those savings are insured by the National Credit Union Administration—up to $250,000, the same amount as the FDIC. (Although you likely don’t need to worry, as credit unions tend to be much more stable than banks.)
Determine your banking needs
There are some differences between traditional banks and credit unions. Depending on your credit union, you may not have some services, such as online banking, safe deposit boxes or money orders. And not all credit unions offer ATM cards. Determine what’s important to you in a financial institution, and check whether your local credit union offers these services.
Ready to switch? Compare average credit union and bank rates and find a credit union near you using the Credit Union National Association’s search tool.
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