In addition to meeting eligibility requirements, you may be required to pay a one-time membership fee (generally up to $25) and open an account with a small deposit (usually below $10). This sometimes comes with a small fee, though the credit union might pay it on your behalf.įor instance, Alliant Credit Union allows you to become a member by joining the charity Foster Care to Success, and Alliant pays the $5 fee on your behalf. Some credit unions allow you to become a member by joining a participating organization. If you don't meet any of the eligibility requirements, there may still be a chance you can join. You may also qualify if one of your family members is already a member of a particular credit union. Another option may be through affiliation with certain groups, such as labor unions or schools. You may qualify if you live in a certain town or work with an eligible employer. You can become a member of a credit union in many ways, but each has its own requirements. However, there's a small difference: Credit unions are insured by the National Credit Union Administration while banks are backed by the Federal Deposit Insurance Corporation (FDIC). Thankfully, most credit unions provide the same $250,000 insurance that banks do. When it comes to deposits for checking and savings accounts, it's important to make sure the money you deposit is insured. However, fewer products doesn't mean less competitive offerings: Credit unions offer some of the best terms thanks to how they reinvest profits back into their products. For example, a credit union may only offer one or two credit card options, compared to a bank that may have a dozen choices for all kinds of lifestyles. You may have a smaller selection of product offerings with a credit union over a bank. In addition, credit unions were often created to serve specific regions, communities or businesses, so they are known for providing better in-person customer service at their physical branch locations. The main difference between credit unions and banks is that credit unions are nonprofit, member-only financial institutions, whereas banks are for-profit institutions open to anyone. The eligibility requirements differ across credit unions, which we explain more in depth below. Since a credit union is owned by members, you'll need to meet eligibility requirements in order to qualify to open an account, apply for a credit card or take out a loan. Like a bank, credit unions charge interest and account fees, but they reinvest those profits back into the products it offers, whereas banks give these profits to its shareholders. Members elect a board of directors to manage the credit union to ensure that their best interests are represented.Ĭredit unions aim to serve members by offering competitive products with better rates and fees than you see with a for-profit bank. Credit union members can access the same kinds of products and services as offered by a traditional bank, such as credit cards, checking and savings accounts and loans. Investing +More All Investing Best IRA Accounts Best Roth IRA Accounts Best Investing Apps Best Free Stock Trading Platforms Best Robo-Advisors Index Funds Mutual Funds ETFs BondsĪ credit union is a nonprofit financial institution that's owned by the people who use its financial products. Help for Low Credit Scores +More All Help for Low Credit Scores Best Credit Cards for Bad Credit Best Personal Loans for Bad Credit Best Debt Consolidation Loans for Bad Credit Personal Loans if You Don't Have Credit Best Credit Cards for Building Credit Personal Loans for 580 Credit Score Lower Personal Loans for 670 Credit Score or Lower Best Mortgages for Bad Credit Best Hardship Loans How to Boost Your Credit Score Taxes +More All Taxes Best Tax Software Best Tax Software for Small Businesses Tax Refunds Small Business +More All Small Business Best Small Business Savings Accounts Best Small Business Checking Accounts Best Credit Cards for Small Business Best Small Business Loans Best Tax Software for Small Business Personal Finance +More All Personal Finance Best Budgeting Apps Best Expense Tracker Apps Best Money Transfer Apps Best Resale Apps and Sites Buy Now Pay Later (BNPL) Apps Best Debt Relief Best Mortgages for Average Credit Score.Best Loans to Refinance Credit Card Debt.
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