Is A Credit Union Right For Me?

Author: BankFeeInsider.com     Tuesday, September 02, 2014 12:00 AM

The decision to join a credit union instead of a bank can be a tough one, but for people who want to support their community, credit unions are the financial institution of choice. Credit unions also have the broader appeal of offering good interest rates on savings accounts and loans. If you're thinking of joining a credit union, but not sure if it's the right decision for you, then educating yourself will help. Here are a few reasons why many people turn to credit unions:

Lower Fees, Bigger Savings

Credit unions may function like banks, but they're actually non-profit organizations. They have no shareholders. Profits are given back to members in the form of higher interest rates on savings accounts, no-fee checking accounts, lower interest rates on loans and more backup options in the event of an overdraft scenario, so you can avoid being slammed with fees.

Accountability

Credit unions have a system of accountability, because each member is an owner. An article in DailyFinance.com points out that many credit union presidents are reluctant to institute higher overdraft fees because they must face the members of their credit union on a daily basis: in local grocery stores, at school functions and soccer games. At credit unions, management decisions are made with the people of the community in mind.

Trainings

To support the general community, many credit unions offer financial education trainings. These trainings cover basic topics like managing a checking account, or more advanced topics, like smart investing. Many credit unions also offer trainings for young people, so they can learn at an early age how to manage their money and make smart financial decisions. Credit unions may form partnerships with local schools, to enhance these programs and increase their impact.

In some cases, these trainings can be creative as well as useful. This article posted on NerdWallet mentions a credit union wherein "simulated careers" were used as a training tool for young people. In this program, students were given pretend salaries and financial obligations. Through this game, students learned about financial management, bill paying and more.

Community Support

With community outreach and programs designed to benefit local citizens, credit unions make an effort to improve the lives of the people in their town or city. This support may come in the form of scholarships, grants, small business micro-loans and more.

Credit unions are not big banks. While they do offer the same basic services, credit unions are designed to give back to the community and help the people. If this is an agenda that you would like to support, then you should be happy joining a credit union.

Source: BFI