3 Facts About Credit Unions
by Letitia Moreno
A credit union is a financial institution that is comparable to a bank. Credit unions are not exactly like banks, but they do offer most of the same services. If you are looking for a new financial institution to use for your banking matters, you might want to learn more about credit unions. To help you understand them, here are three facts you might want to know.
1. The Members Own Them
When you compare a bank to a credit union, there is one significant difference. Private individuals own the bank, and these individuals earn money from the bank's profits. A credit union is not owned by private people. Instead, the members of the union own the bank. Anyone who opens an account with the credit union is an owner of the institution. To become an owner, you simply need to open an account. Credit unions do have rules relating to who can open accounts there. You must fit their criteria in order to become a member and open an account. These criteria can include working for certain organizations, living in certain communities or areas, or working for a specific industry. Check with the credit union you're looking into to see if you qualify.
2. They Offer a Wide Range of Services
The second thing to know about credit unions is that they offer a wide range of services. In this sense, they are like banks. A credit union generally offers savings accounts and checking accounts. They might also offer other types of investment accounts, such as certificates of deposit (CDs). Additionally, a credit union offers loans. They only issue loans to the members, though. If you want a loan through a credit union, you must become a member before you can qualify for a loan.
3. The Members Benefit from the Services
People join credit unions for two reasons. First, they join them because they need financial services, like loans and bank accounts. Secondly, they join credit unions instead of banks because credit unions offer more benefits. When you bank with a credit union, you might get higher interest rates on your deposits. You might also get lower interest rates on your loans. Credit unions do not try to earn profits. Instead, they aim to offer excellent banking services to their members, and the members earn the rewards.
Credit unions have rules relating to who can join them. If you look around, you might find one that you can join, though, and joining offers the chance to reap the benefits they offer. If you want to learn more, contact a local credit union.
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