You may have heard that many people like credit unions better than banks.
The nonprofit, member-owned financial institutions often have lower interest rates on loans and credit cards, higher rates on savings and fewer fees for checking accounts. To some, they also seem friendlier.
But with so many choices, how do you pick the credit union that’s right for you? Compare rates and fees, of course, but you also should check out these criteria:
1. Can I join?
Anybody can join a credit union, but not necessarily any credit union. Eligibility may be based on:
- Employer: Many employers sponsor their own credit unions.
- Location: Many credit unions serve anyone who lives, works, worships or attends school in an area.
- Family: Many credit unions allow members’ families to join. So, if someone in your family is a member of a credit union, you may be eligible, too.
- Group membership: Belonging to specific churches, schools, alumni associations, labor unions and homeowners associations may qualify you.
2. Does it offer services I need?
Make sure that your credit union offers home lending services, issues credit and debit cards, provides auto loans, features a good savings program, and offers financial counseling.
Also, know whether you’ll have easy access to ATMs or branches nationwide.
Ask if banking is restricted to business hours. Also, if you need it, see whether the credit union offers mobile apps to view your account balances, pay bills, deposit checks and send money online.
Maybe you’re looking for services such as investment, retirement and estate planning. Some credit unions offer personal finance help like their big-bank cousins, others don’t. So be sure to ask.
3. Which credit unions are located near me?
Online resources can help. CreditUnion.gov offers a tool that identifies credit union branches by ZIP code or city, shows which of them have drive-through lanes or ATMs, and provides details including address, phone number and website.
4. Will my money be safe?
The National Credit Union Administration (NCUA), with the backing of the U.S. government, operates and manages the National Credit Union Share Insurance Fund, insuring up to $250,000 for each member the deposits of all federal credit unions and the majority of state-chartered credit unions.
5. How do I get started?
If you are eligible to join, you can easily become a credit union member by completing a membership application, depositing and maintaining the minimum par value of a share, and paying a one-time membership fee if there is one.
Also, if you’re moving your business from a bank, ask if the credit union can make transferring easy with a switch kit. The time-saving packet of forms and information guides you through the process of switching and may include direct deposit forms, worksheets and checklists.
What’s your experience with credit unions? Share with us in comments below or on our Facebook page.