Money Tips

Credit Unions 101

Credit Unions 101

It's easy to join a credit union, you can often become a member based just on what city or county you live in. Credit Unions often offer better customer service than banks because when you're a member you're not only a customer but a shareowner.

Credit Unions

What is a credit union?

Credit unions and banks are both financial institutions that provide similar services to consumers, however credit unions are non-profit organizations, while banks are for-profit organizations.

Credit unions exist to serve a community of people tied by a "bond of association," this could be through a geographical region, employment, membership in another association, faith-based organization, or some other organization that has nothing to do with the credit union.

Credit unions serve that community by providing financial services with the most favorable terms they can afford to offer. Credit unions often offer small dividends (payments returned to members), discounted loan rates, reduced fees and other benefits to its members.

Is my money safe?

Funds in banks are backed by the Federal Deposit Insurance Corporation, and funds in credit unions are backed by the National Credit Union Administration. Deposits are insured up to $250,000 per person, per ownership category.

More information on credit unions can be found at nerdwallet and also the Consumer Financial Protection Bureau (CFPB).

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