What is a credit union?
A federal credit union is a cooperative, not-for-profit financial institution organized to promote thrift and provide credit to its members (who are also its customers). Federal credit union members are provided with a safe, convenient place to save and borrow at reasonable rates, with savings insured up to $250,000 by the National Credit Union Share Insurance Fund (NCUSIF). Certain retirement accounts are insured to $250,000.
How do I join a credit union?
Membership in federal credit unions is not open to the general public. Instead, it is limited to persons sharing a common bond of occupation, community or association. Examples are employees of corporations, members of associations (such as Knights of Columbus) and residents of a defined area (such as a town or a neighborhood).
Many credits unions have a "once a member, always a member" policy, and most also permit members of the immediate family or household of a member to join.
What is the difference between a bank and a credit union?
The key difference between a bank and a credit union is that banks are owned by shareholders, not customers, and are for-profit -- which leads to higher fees and rates on loans, since excess profits are returned to shareholders in the form of dividends. A credit union returns any excess to members in the form of dividends as an added bonus.
A federal credit union is member-owned and controlled through the election of a board of directors drawn from membership. See the benefits of a credit union.
Do credit unions offer as many services as a bank?
In most cases, yes, although some smaller credit unions might not offer as broad a range of services. Regardless, services offered usually feature lower fees, better rates and superior terms and conditions than found at banks. Compare rates between credit unions and banks.
Is my money safe in a credit union?
Your funds are safe at your federally insured credit union.
All credit unions provide insurance to their members from the National Credit Union Administration (NCUA ), an independent agency of the federal government. This means that your money deposited in a federally insured credit union is insured up to $250,000, similar to the insurance provided by the FDIC (Federal Deposit Insurance Corporation) to banks. Not one penny of insured savings has ever been lost by a member of a federally insured credit union.
Financial Calculators: CULookup.com financial calculators provide you with the tools to make important financial decisions and reach your financial goals. Research mortgage terms or auto loans, manage personal savings and plan for retirement.
Learn more about finances and money management.