With the multitude of financial options out there, it can be hard to choose the right institution. They all seem to offer something special that sounds like the perfect choice. But, in good times and bad, consumers will get the best value from a credit union.
When consumers deposit money into a credit union, they become a part owner. Credit unions are non-profit financial cooperatives that have no stockholders to answer to. That initial minimum deposit- typically between $5 and $25- is the consumers’ ownership stake in the credit union.
Credit unions are democratically controlled organizations. Each member has an equal vote by virtue of that ownership stake. In banks, the more stocks a person own, the more votes that person has when it comes time to elect board members.
Rate of Return
Credit unions are known for providing higher interest on savings and lower interest on loans as a general rule. Any financial institution can lure customers in with a special rate offer, but they often come with a lot of restrictions. Credit unions tend to create new products and offers that serve the member first. For example, few credit unions have universal default clauses or hefty balance transfer fees on their credit cards.
A Wide Range of Services
Credit unions have a reputation for being limited in the services they offer. This may have been true in the past, but as competition in financial services has increased, credit unions have diversified their product and service offerings greatly. Some offer insurance brokers, investment planners, business loans and counseling, even wireless phone service.
Another long-standing belief is that credit unions are hard to join and have limited locations and hours. Credit unions do have limited fields of membership, but nearly everyone is eligible to join at least one credit union. Some are based on where a potential member has gone to school or works, and some are limited to a particular geographic area. An easy-to-navigate website helps consumers find a credit union.
Location and open hours are no longer barriers to use. Most credit unions offer free online banking to personal customers (business customers have pay for this service, although some credit unions offer free online banking to business customers, too). Online banking allows anytime access to account information. In addition, most have a phone branch or contact center staffed with representatives who can transfer funds, cut a cashier’s check, open a loan, or just give a quick balance check.
In addition, many credit unions participate in shared branching networks. Shared branching allows members to access their credit union accounts through a different credit union location. This is perfect for members who are traveling or move out of the area- no need to change financial institutions just because of a move. Members can find a shared branch by calling the credit union’s contact center, visiting CU Swirl, or stopping by many 7-Eleven locations.
Compare rates and products at an independent source, such as BankRate.com, and gather opinions from financial experts, such as Dave Ramsay and Jean Chatzky, about how to choose a financial institution. Then decide whether credit unions are the right choice.