What is a credit union?
I want to find out more information on credit unions, i would like to know what they are, and how they work.
- Mel MLv 610 years agoFavorite Answer
Credit unions are financial institutions, like banks. They offer many of the same products and services -- savings accounts, checking accounts, ATM/debit cards, credit cards, auto loans, mortgages, home equity loans, etc. Both have deposit insurance so your money will be safe. Credit unions have insurance through the National Credit Union Administration, which is a government agency similar to the FDIC. Most of the time credit unions offer better rates and have fewer fees than other financial institutions. Banks have more branch offices than credit unions.
The main difference from your viewpoint as a consumer is that you can become a customer of any bank, while credit unions can only serve people who fit in their "Field of Membership." Some credit unions are sponsored by a company and only the employees can join. There are numerous credit unions that have "community charters" which allow them to serve people who live within a defined geographic region (i.e. city, county, zip codes, etc.).
At a credit union, the people who have accounts are the owners of the financial institution. There are no outside investors, like you find with banks. As financial cooperatives, credit unions offer people the opportunity to pool their resources (deposits) to provide products and services (loans, transactional accounts). Since credit unions are not-for-profit, all proceeds generated are put back into the institution in the form of better rates, fewer and lower fees, new products & services, and bonus dividends.
Hope this helps. Good luck.
- Let me steer youLv 710 years ago
My credit union offers ALL the same services as a regular bank with much lower fees. You put $25 in a savings account and leave it there and your checking is free with unlimited checks, debit card, overdraft protection (if your credit report is good). And you can use the ATM machines at any credit union for free, they all honor each others debit cards.
A credit union is owned by the people who use the union. The money you "keep" in your savings account is your share of the union. The people who do their banking business there are the ones who say how the union is run (within the guidelines of the FDIC and the National Reserve). There was a time when you had to belong to a special class to belong to a credit union. Now anyone can join and that really changed the way the regular banks did business to compete with the credit unions.
I haven't belonged to a regular bank in over 20 years. I have two accounts, and they're both at credit unions.
- Go with the flowLv 710 years ago
Credit unions offer better rates, and have lower fees.
Google your city name followed by the word credit unions.
Most cities have them.
They don't offer the services big-boy banks do.
They often only have 1 ATM machine.
Don't offer 24 hour telephone service (handy if you lose your card).
And their online websites are outdated.
Pros and cons to everything..
- paapaaLv 610 years ago
just like a bank but usually have better interest rates.