I recently walked in my first credit union. I have always been a big bank kind of girl. I had to hop in there before it is the closet ING ABM to my house. To be honest, I didn’t know what a credit union was and decided to do some research. Since I stopped being a student my banking fees have continued to rise. I hate having to pay to access my own money and this was part of the reason that switched over to ING. Although ING has been great, I sometimes want to talk to a person and I think a credit union will allow me that opportunity, A credit union is financial cooperative institution that is managed and owned by the members. It is also very closely regulated just like all other financial institutions such as banks. The main purpose of a credit union is to provide credit to its members at competitive rates. They also provide additional financial services to its members such as banking.
The main difference in credit unions between banks is that those with accounts at the credit union are technically owners of the credit union, they are even in involved in electing the members of the board of directors, and this usually involves a democratic process. Members of a credit union feel they are a bit higher than banks as they are owned by the community and serve their people and not profit from them.
The credit union’s policies and interests rates are decided by the board of directors which we discussed above are elected by the members of the credit unions. Credit unions offer a lot of the same services that banks offer but using different terms. Their most common services include savings accounts, checking accounts, online banking, and credit cards.
For all purposes including tax purposes a credit union is considered nonprofit. This means since the nonprofit status exempts credit unions from state and federal taxes which means that they can provide competitive rates and products.
The credit unions you know and love today started back in 1852 when Franz Deiltzsch put together two projects into what is recognized as today’s credit unions. If it wasn’t for the hard work and dedication of this man, the world would not have the credit unions that we have today. Credit unions were originally created to provide a convenient place where its members can save money and also get loans at reasonable rates and prices.
Credit unions differ from today’s traditional banks this main difference is that banks are owned and regulated by stockholders whose biggest goal is to benefit from its shareholders. The existence of credit unions is to look out for the welfare of its members and all profits that are made can then be reinvested which allows the credit union to offer even lower interest rates on loans.
You may be thinking that this sounds too good to be true and how can you become a member of a credit union. Well good news is we can show you exactly what you need to become a member.
Some credit unions may have specific requirements such as only catering to people in the military; however once you join you are allowed to stay a member even if you no longer qualify based on that role. The best thing you can do is to following these steps to inquire about credit unions.
- Talk to your state credit union and see if they can give you information about various local credit unions in your area.
- Talk to your employer to find out if the company you work for participates or sponsors a particular credit union.
In all a credit union is the best bet for many over a bank if you meet all the requirements needed to participate in a membership. You will not be disappointed with your decision to join one.