Are Credit Unions For You (And Me)? | brokeGIRLrich
I’ve been 100% sold on Ally for about 5 years. It’s a terrific bank with few downsides, but every once in a blue moon, I need a brick and mortar institution to help me out with something like a cashier’s check or a large cash deposit.
I’ve banked with Wells Fargo (who made my life so incredibly difficult that I tell everyone I know not to bank there) and after closing that account, I opened one with TD Bank, which has been adequate but requires me to keep a $100 balance in the account at all times.
The thing is, I’ve really heard nothing but good things about credit unions and I’m interested in possibly switching from TD Bank to one this summer. Despite hearing nothing but good things about credit unions, I don’t know much about what they are.
So what is a credit union?
A non-profit money making cooperative whose members can borrow from pooled deposits at low interest rates.
Rather than being a for-profit bank, credit unions focus on getting the best deals for the members. Because of this, they often have the best rates for loans and higher interest rates for savings or checking accounts.
Credit unions otherwise operate very similar to a bank. You can still make deposits and withdrawals. They also offer the same types of loans as any bank. Additionally, different credit unions offer a lot of other little perks, like very small life insurance policies (only for Accidental Death & Dismemberment) or financial education classes.
Credit unions are run by a Board of Directors, but every member of the credit union has the right to vote on the operations of the credit union and the Board of Directors is elected by the credit union members.
Banks are federally insured by the government up to $250,000 per bank. Credit unions are not FDIC insured, but that doesn’t matter because the federal ones are insured through the National Credit Union Insurance Fund, NCUSIF. Accounts are insured up to $250,000 per individual account per credit union, not per branch. Additionally, a join account can be insured up to $500,000 and the owners can also each have an individual account in addition to that, so the couple can be insured up to $1,000,000.
So where to start looking for a credit union?
Common places that offer credit unions are through religious organizations – either your church or synagogue itself or through the denomination as a whole – community organization, the military and universities. Some communities even have their own credit unions, like the Alternatives Federal Credit Union in Ithaca, NY.
I do have to say that with my current search, freelancers do seem to be considerably more limited. There are quite a few credit unions around my home that are connected to local companies – the biggest being the Merck Credit Union. However, after branching out from general community credit unions, I’ve found one so far that I could qualify to join:
Christian Community Credit Union
I have to say I’m a little dismayed because I find it likely that both Stockton University and Liberty University are probably affiliated with credit unions, but Google has not helped me out with finding out anything about where their alumni can apply.
So the search continues.
We don’t bank with a credit union, but I we will most likely be using one for our next mortgage. After some extensive research it seems that most of the credit unions by us offer significantly lower rates (which means more money in my pocket!).
Elise @ Simply Scaled Down recently posted…Why I Don’t Wear Makeup (And Feel Prettier For It)
Yeah, it definitely looks like credit unions have hard to beat rates for any loans.
I’ve been a credit union member for 20+ years. Love the no ATM fees, and other features like free credit counseling
Brian recently posted…Build a Better Financial Safety Net
I’ve always banked at regular banks, but my car loan is with a credit union and I’m thinking about opening a checking account there to make it easier to make my car payment.
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I have accounts in 2 credit unions ~ one in NY that I never closed out, and one in Florida. They are fantastic. When we got here, we opened up an account at a bank, but closed it within a month. The stupid rules are so annoying. You had to keep a minimum of $500 in checking, or the fees started racking up. Fees? Why do I have to pay fees to use my own money? So we went to a local credit union where life is beautiful all the time. I loved our credit union in NY so much, I still don’t want to close it!
kay ~ lifestylevoices.com recently posted…A Young Frugivore’s Fancy
I belong to a credit union and have since I was around the age of 14. Love it and I wouldn’t have it any other way!
Michelle recently posted…How To Control Your Summer Cooling Costs
We have been credit Union members for just over two years. Not only did they offer us a way better rate for my vehicle loan, they also have annual dividends! We got paid to use them instead of the other way around.
The dividends sound terrific!
I keep meaning to check out credit unions. I know rates can be better, and fees can be less.
One thing holding me back: I like being able to find an ATM easily. I’m pretty sure credit unions have deals with other banks about ATMs, though, so it’s getting to be a silly excuse.
Abigail @ipickuppennies recently posted…Achievement unlocked: Sleepyhead!
I think they do too. A friend of mine was telling me that he actually uses his ATM card so infrequently that the $2.00 fee once or twice a month, if that, isn’t even a deal breaker for him.
My mom belongs to a credit union from when she used to work as a NY State teacher and I think there are pros and cons to using one. She gets great rates on loans and amazing rates on her savings account, but they are also very difficult to use and they lack a number of the technology conveniences that more mainstream banks have.
Shannon @ Financially Blonde recently posted…Music Mondays – Dear Future Husband
That’s interesting, you’re the first to mention a difficulty in using them. Although to an extent, I’d guess it varies from credit union to credit union.
I opened a credit union account when I was in college but used a local bank primarily. But then the bank got bought out and started charging lots of fees, so I closed the account and now use the credit union exclusively. Love it.
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Would credit unions be a good way of getting money in and out without fees? I had heard that fees are not done with credit unions. that would be so cool if this is true.
I think it probably varies from credit union to credit union, just like different banks have different fees (or lack thereof). You should look into local ones and see what their stance is!
In a credit union, do they by chance need a certificate of deposit when opening an account or even asking for a mortgage loan? I’m thinking about opening an account with a credit union and mainly using it for taking out a home mortgage loan. Since my plans are to first sell a house and then buy a house later on.
I think your best bet is to call the credit union you’re interested in working with and ask them. Credit unions can differ from one to the other about what they require.
I use a credit union and they are amazing!
Credit unions look like they would be more than worth it to switch over to myself, I need to look into them more. It’s nice that it’s a non profit so your interest rates are going to be ridiculously big. One of the biggest reasons I do everything I can to avoid loaning money from a bank is their high interest rates, so this would be a better place to dabble a bit.
Wow, definitely a lot to take in! There is so much useful information on here! Thanks so much for sharing. It is quite difficult to manage money and bank accounts and having something to help is always a great idea!