Credit unions and banks both allow you to open checking accounts, invest money and borrow against lines of credit. However, local credit unions are owned by members and largely run by volunteer boards, so you benefit as long as you can qualify for a credit union membership. When you compare credit union information to that of a traditional bank, you'll find lower interest rates when borrowing and higher percentage rates in savings as a credit union member. Business owners can offer memberships to employee credit unions at no cost -- a benefit for both the employer and the employees.
A small percent of credit unions are residential or community-organized and offer services to those in a specific locale. The United States has an assortment of credit unions, and nearly 78% of those are occupational or employee credit unions which means they offer membership based on where you work or which school you attend. Most credit unions are state chartered credit unions and must adhere to strict regulations set up by the state in which they operate.
Consider the following information when you compare credit union information:
1. Credit union membership requirements
2. The number of services and percentage rates
3. Customer service and ease of use
Decide whether or not you qualify for a credit union membershipAccording to federal statute, credit union memberships are available through organizational affiliations or communities. But with such a wide range of existing organizations, there is likely a credit union membership for you. Check for a credit union offering services to your community or for one that is affiliated with a group to which you may belong. Make sure your employer isn't offering membership to a credit union; you may have missed out on an office circular or an email offering such information.
The National Credit Union Administration's consumer assistance center will help you with a list of credit unions in your area.
Compare credit union rates and productsAlthough credit unions of the past offered only basic services like checking and savings accounts, both employee credit unions and state chartered credit unions now offer a broad spectrum of financial services such as individual retirement accounts and investments in mutual funds. If you make the commitment to switch from a bank to a credit union, make sure the credit unions offer the same products and services as your bank.
Bankrate.com offers a percentage rate comparison for credit unions and banks. For a side-by-side comparison of products and services, go to epinions.com.
Browse websites offering reviews and other credit union informationIs there a website so you can manage your accounts online, day or night? Is it conveniently located and does it provide decent service hours? You need to consider the convenience of the credit union since they are operated by their own members and may not be open on weekends or have self-service options, as do many traditional banks. Consult websites specifically devoted to consumer complaints for credit union-specific information.
Contact the consumer complaints division of the National Credit Union Administration via e-mail for information for the credit unions you consider. CU Service Centers offers a state-by-state list of credit unions for hours and directions, or you can search the membership directory by credit union name.
- If your employer offers credit union memberships, ask your human resources department about any upcoming membership drives. In that case, a credit union representative would likely provide an information booth at your workplace.