What Are the Benefits of Credit Union Membership?

Be confident in your financial institution.

As you consider which kind of financial institution you will entrust with your funds, you are faced with weighing the differences between a credit union and a bank. There are many benefits to considering a credit union as your primary financial institution.

Directors

According to AllBusiness.com, each credit union member is able to vote on who is a director for the credit union. This level of involvement in choosing who runs the financial institution does not exist for customers of a bank.

Interest Rates

U.S. News and World Report says that, as a general rule, the interest rates on credit union loans are lower than banks, and the rates on savings accounts are higher.

Not-For-Profit Status

As MSN Money points out, a credit union operates under a not-for-profit status, which means that profit at the end of the year is generally given out as dividends to members. This is normally not the case with banks.

Service Fees

According to AllBusiness.com, credit unions tend to offer lower service charges on things like loans and credit cards. One of the reasons a credit union can do this is their not-for-profit status exempts them from state and federal taxes.

Financial Security

One of the traits a credit union does have in common with a bank is all deposits in a credit union are insured by the federal government up to $250,000 per deposit.

References

• AllBusiness.com: The Benefits of Credit Unions
• "US News and World Report" Magazine: The Benefits of Credit Unions
• MSN Money: Ditch Your Bank for a Credit Union