Uses of Credit Unions
Credit unions compete with banks and offer many of the same services and financial products.
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Accounts
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When you are a credit union member, you can open checking and savings accounts. Most credit unions also offer money market accounts. When you open an account with a credit union, it will have most of the same features you'd find with a bank account. You can draw on the account with a checkbook or a debit card. You can also earn a return on your deposit that is higher than what you can expect from a bank.
Loans
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Credit unions also lend money. A credit union is member-owned, so it is essentially a network of people who deposit money so that it can be lent to other members. These loans have reasonable interest rates and terms. You can borrow money for personal reasons, for the purchase of a car or in the form of a mortgage. Business loans are also sometimes offered through credit unions, depending on the size and rules of the credit union.
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Insurance
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At many credit unions, you can also gain access to a number of insurance products. These insurance products are typically not offered by the credit union directly. Instead, they're offered by companies that work with the credit union. The credit union allows an insurance company that it trusts to offer products and services to the members. This way, you can get access to homeowners insurance, life insurance, auto coverage and any other coverage that you may need.
Investments
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At a credit union, you can also usually purchase investment products. The credit union may have a broker that works in-house to offer services to the credit union members. This gives you access to stock, bonds, mutual funds and other investment products. You can also usually find certificates of deposit that are available directly from the credit union. Unlike investment accounts, CDs are guaranteed by the credit union and typically are backed by the National Credit Union Administration, an independent federal agency that charters and supervises federal credit unions.
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