Where you decide to put your money may seem obvious now, but you should remember that you do have options. Instead of assuming the bank right down the street is the best fit since it may be right on your way to work, although convenient, there could be a better solution for your needs. Just like any decision in life, especially when it’s related to your hard-earned money, it pays to make an informed one.
When we think about our money, many people quickly jump straight to the traditional bank setup. But have you considered a credit union? Although banks and credit unions operate under similar laws and you can typically receive similar types of offerings at each, the difference can be found in the client experience you, as the customer, receive. According to Investopedia, the difference between a bank and a credit union is created, owned, and operated by its participants. Therefore, it is considered a not-for-profit enterprise and enjoys tax-exempt status. What does this mean for you? Here are 8 benefits to joining a credit union:
- Enjoy Member Status: since a credit union doesn’t have stockholders, it puts its customers (also known as its members) at the focal point of everything it does. Instead of a for-profit structure, credit unions are nonprofit and can focus entirely on the client experience.
- Flexibility: speaking of pride in client experience, credit unions can be more flexible in the types of members it serves. For example, it may be more forgiving if you have a lower credit score or find yourself struggling to make ends meet. A credit union has the ability to be more willing to work with different types of customers and situations. Loan officers will meet with individuals 1:1 to find loan terms that work for their particular situation. Having this access to apply for loans in-person and explain your situation can make the difference between getting a loan or not.
- Qualify to Join: although flexible, most credit unions have rules about who can join. Acceptance could depend on where you live, who your employer is, what school you go to, or simply retaining a savings account with a minimum amount deposited. Once you qualify, you then become a member of the credit union and can enjoy your membership status and benefits that come along with it. Check Lookout Credit Union's membership eligibility.
- Save on Fees: in general, credit unions charge less fees than banks – which goes back to its nonprofit status. Banks tend to make their money by charging fees, whether monthly service fees or steep overdraft charges. Credit unions, on the other hand, tend to charge less on fees, including transfer fees, ATM fees and overdraft fees. This can really add up over the long haul, so be sure to understand the different options and the “fine print” on your accounts. Save on ATM fees at Lookout Credit Union.
- Find the Best Interest Rates: also with a focus on customers instead of profits, credit unions can offer higher rates on savings accounts and lower interest rates on loans. So whether you’re exploring a car loan, student loan or mortgage, you should add a credit union into the consideration set to compare against. Check out Lookout Credit Union's current rates.
- Educate Yourself: credit unions not only offer personalized service, but many also hold educational events throughout the year to help you learn important personal finance topics. By keeping their customers at the center of the business, it helps keeps the focus on your financial goals, rather than their bottom line.
- Community Focus: since credit unions provide physical branch offices and more are customer-focused, this also translates to more involvement within the local community. Members may be in similar geographic locations or even have similar interests, growing the network of members even further. Plus it’s always comforting to know your credit union services customers like you, so may have dealt with similar experiences and have offered advice for what you’re going through. Check out Lookout Credit Union's award-winning community involvement program Teal Team VI.
- Safety Guaranteed: if you’re concerned about how secure your money is at a credit union, worry no more. Just as banks are secured by the FDIC, credit unions are backed by the NCUA (National Credit Union Administration). This covers $250,000 in the unfortunate event your credit union fails.
Credit unions bring a different set of benefits to the table when it comes to where and how you manage your money. It’s important to do your research and talk to your network to find the best solution for your needs. Remember, not all banks or credit unions are created equally. By doing your due diligence and research on all your options, it can help you can feel more confident in your money’s home today and for years to come.