Credit Unions May Offer Better Accounts and Benefits Than Your Bank
publication date: Jun 29, 2012
Credit unions are a unique creature (I guess I should say species) within the financial services firm universe. Credit unions are similar to banks in the products and services that they offer (although private banks tend to offer a deeper array). However, unlike banks which are run as private businesses seeking profits, credit unions operate as non-profit entities and are technically owned by their members (customers).
The Promise of Credit Unions
The best credit unions offer their customers better terms on deposits including checking and savings accounts (higher interest rates; lower fees) and some loans (lower rates and fees). If they are efficiently operated, they are able to do so because they don't need to make a profit.
Don't assume that a credit union necessarily or always offers better products and services than traditional banks because they don't. The profit motive of private businesses isn't an evil - quite to the contrary, the profit motive spurs businesses to keep getting better and improving on what they do.
Credit unions have insurance coverage up to $250,000 per customer through the National Credit Union Administration similar to the FDIC protection that banks offer their customers. As when checking out a bank, be sure that any credit union you may deposit money into has NCUA insurance coverage.
Finding a Credit Union You Can Join
The trick to getting access to a credit union is that by law, each individual credit union may only offer their services to a defined membership. Examples of the types of credit union memberships available include:
- College and University
- Place of Worship
There can be some overlap between these groups. In order to access a credit union, you may be able to use your family ties.
To find credit unions in your local area, visit the Credit Union National Association website.