When you think of a credit union you likely think of car loans. While it is true that credit unions are great places to go to when you are in the market for a car it is also true that credit unions offer many more benefits to members.
Credit unions operate in many ways like banks but there are some important distinctions. For example, credit union are not-for-profit, cooperative financial institutions. These institutions are managed and directed by members and a volunteer board. Unlike banks, membership or participation is not open to the general public. Membership is only available to groups that share something in common, such as an employee group. Some credit unions allow immediate family members or those sharing a household with the primary member to join the credit union as well.
Like banks funds deposited with credit union are insured up to $100,000 by the National Credit Union Share Insurance Fund; members enjoy ATM and online banking privileges and a variety of loan packages and services. Credit unions hold great appeal because of the attractive interest rates they offer. Rather than pass profits to stockholders, credit unions return them to members in the form of lower interest rates on loans and higher interest rates on savings accounts. Because credit unions are non- profits they typically have lower operating expenses.
Again, members benefit by way of reduced fees and more attractive rates. For example, long before banks began offering free, no minimum balance checking accounts, credit unions offered this benefit to their members.
If you are interested in joining a credit union you should first check with your employer to learn if they are a member agency. You might also check with your spouse as you may be able to join through if his or her employer is affiliated with a credit union (your spouse must become a member first). Other options for membership include religious and alumni organizations you currently have. You can retain your membership even if you leave the employer or organization you were affiliated with when you joined.
Credit unions work to make sure that you are more than an account number. These member-owned cooperatives conduct annual elections and accept votes from everyone, regardless of account balance. Not only are members entitled to a vote, they can also offer themselves as candidates for board membership or committee participation.
Like banks, credit unions offer a variety of loans including auto and mortgage loans, home equity loans and home equity lines of credit. Members can work with credit union representatives to find appropriate options for individual financial situations. Additionally, many credit unions offer financial and retirement planning advise. This service is free and can be a great help for those with particular financial goals, or concerns about outliving their assets.
Joining a credit union can be a good financial move regardless of how much wealth you have created. The benefits of membership including friendly, personalized service and generally lower fees may be just the thing you need to escape the mega bank merger blues.