Have you ever wondered what the difference is between credit unions and banks? You’re not alone. The difference is more in the way they are set up than the way they operate.
They offer the same basic services as traditional banks. You can open various types of accounts such as checking or savings accounts. As well as investment type accounts like money-market accounts or certificates of deposit.
They also offer a variety of loans including mortgages, personal loans and auto loans. Plus they're small and local so the customer service is usually comparable to that of a small community bank.
Most of the time, they offer better interest rates for interest-bearing accounts and lower interest rates on loans. This makes them an appealing choice.
Unlike traditional banks, they are non-profit and are either state or federally chartered. This keeps their overhead much lower and the savings are passed on to you.
The ownership is shared by its members. Each depositor is a member and each member has a vote when decisions need to be made. There is a board of directors and most member votes are cast through the mail.
To be eligible to bank at one, you must belong to a particular group or work for a qualifying company. This could be as simple as living in a certain town or being a state or federal employee.
There are many to choose from and almost anyone can qualify to join at least one. You can find one near you.
Look for one that is insured by the National Credit Union Administration (NCUA). This is similar to the FDIC for traditional banks in that if anything happens to the financial institution, your money is protected.