Here are five things a credit union does that are different from other financial institutions. Products and programs vary between different credit unions.
1. Returns profits to you as a member.
Credit union account holders act like the stockholders of the organization. A credit union pays dividends on profits to the members. Because credit unions serve their members first, money is also invested back into offering better loan rates and account fees. Many credit unions offer a holiday or vacation account. These accounts request that you hold your money for a predetermined period of time but offer a relatively high interest rate in return. Most credit unions have very low minimum balance requirements.
At a credit union, members can sit in on an annual meeting and vote on the board of directors. A credit union is a cooperative financial institution that gives you a say in what happens with your money.
2. Help you figure out your finances.
Many credit unions offer free financial counseling services. While services vary, you may be able to sit down with a credit counselor to repair your credit score or put together a budget. Frequently, credit unions offer products that help improve or maintain your credit score or offer second chance checking accounts to individuals who have had accounts closed at other banks.
You may be able to check with a local credit union to sit in on free financial education classes on a variety of topics.
3. Your money stays locally focused.
Unlike a bank, credit unions have eligibility requirements. Each credit union has a community area, organization or association a person must be affiliated with in order to join. However, lending services also happen within the same community. Your dollars in a credit union may directly help another individual in your community group or organization.
4. You get unique products.
Credit Unions can design their products around their own unique membership. One local credit union, North Side Community Federal Credit Union, in Chicago offers a set of savings products tailored to adults on a fixed income over age 55. More and more credit unions are offering small dollar loans at reasonable interest rates. There are a number of options to explore at different credit unions.
While Credit Unions still have to follow regulatory rules and strict criteria for approving loans, these organizations can still offer very personal service. A financial institution that has your best interests in mind will work with you on a case-by-case basis to understand your situation and do what they can to help you figure out how to solve your financial concerns.
Your money is working for you in a credit union and is safe. The National Credit Union Association, an agency of the federal government, insures federally chartered credit unions up to $250,000 per account.
Written by Sarah Marshall
Marketing and Partnerships Manager at
North Side Community Federal Credit Union