Why are Interest Rates Lower at Credit Unions
What Makes Credit Unions Different From Banks
A credit union is a member owned financial institution. Unlike a regular bank that sells interest into their company via the stock market, every person who opens an account in a credit union has a controlling interest in the business. Why does this make a credit union so special? With the priorities set to please the members, and not stock holders, the credit union offers many benefits that cannot be found at a standard bank.
Credit unions offer lower interest rates on mortgages, home equity lines, personal and car loans. CD rates are often better at a credit union and savings and checking account are easy to use with little or no cost associated with them. You will find investment opportunities as well as discounted services for a variety of non-financial items as a member of a credit union.
Credit unions also have different ways to determine one’s credit worthiness by developing a deeper relationship outside of numbers.
Becoming a Credit Union Member
To become a member of a credit union you must belong to a specific group of people. This is a requirement for the credit union to be able to operate within the guidelines of the law for this type of financial business. Many credit unions require you to be a member of a certain county or city to join. Others base their membership on profession. Most credit unions have broadened their scope of membership requirements to allow as many people as possible to qualify for membership.
When you become a member you will have all the same amenities as you would with a large bank. Check cards, credit cards, online banking, free checking are just a few of the common items you can expect to receive at a credit union. You will also receive better customer service at a credit union. Again, credit unions are based on membership – the people who deposit own the institution. With this in mind, customer service is always excellent because each and every person is, in fact, an owner.
Finally, there is one other thing to consider when you think about credit unions and how they differ from a bank. Over the last several years you have heard about many banks closing due to financial instability. Ask yourself how many credit unions fell into that category. The answer will be slim to none.
Disclaimer: We are an informational site that receives compensation from companies of products we endorse. We are independently owned and the opinions expressed here are our own.