Tips On How To Choose The Best Credit Union To Join

By Rebecca Lake. May 7th 2016

If you’re looking for a safe place to stash your cash but want a more personal experience than what’s offered by many “big banks”, you may want to consider joining your local credit union. Unlike traditional banks, credit unions are member-owned and operate on a not-for-profit philosophy. According to the National Credit Union Administration (NCUA), there are approximately 91 million credit union members in theU.S.If you’re ready to try the credit union experience, the following tips can help to ensure that you find an institution that is best suited to your financial needs.

Finding Credit Unions In Your Area

The first step in choosing the right credit union is to locate the available organizations in your area. The number of choices available will likely depend on where you live. Typically, the more populated the area you live in, the greater number of credit unions there will be. You can find credit unions in your area by looking in the telephone book, searching on the Internet or by using one of the many online search tools available. Visitors to the NCUA website can use the Credit Union Locator tool to search for credit unions by city, state or zip code.

Once you’ve compiled a list of credit unions in your area, you should consider how their location meets your individual needs. For example, if you go to the bank multiple times per week to make deposits or withdrawals or to conduct other business, a credit union with multiple branches would make more sense than one with a single location that’s a considerable distance from your home or work.

Determining Eligibility

Since credit unions are membership-based, you must meet the institution’s eligibility requirements in order to join. According to the NCUA, eligibility may be based on a number of factors, including your employer, your geographic location or membership in a specific group such as a church or school. Many credit unions will also extend membership to the immediate family of existing members.

Once you have a prospective list of credit unions in your area, you can visit a branch location in person to discuss the membership requirements. You may also be able to access this information through the credit union’s website, if one is available. When evaluating the eligibility requirements, it’s also important to note whether there are any fees required to open or maintain an account.

Comparing Services

When choosing a credit union, it’s important to carefully consider the range of services a particular institution offers to find one that fits your needs. For example, if you prefer to pay bills online rather than writing checks, you’ll need to ensure that any credit union you’re considering offers this service. The range of available services may be determined by the credit union’s membership base and available assets.

Other services that may or may not be offered by your local credit union include direct deposit, financial education or counseling, multiple ATM locations, overdraft protection, home equity loans, mortgage loans, vehicle loans, small business loans, retirement accounts and college savings accounts. If you frequently travel outside the U.S., U.S. News and World Report recommends asking whether you’ll have access to the credit union’s services overseas.

Evaluating The Costs

Each credit union has its own fee schedule that is associated with opening and maintaining an account. For example, some credit unions may charge you a monthly maintenance fee if your balance falls below a certain amount or if you exceed a certain number of checks each month. You may also be charged a fee for using an ATM belonging to a different bank or credit union.

In addition to the costs you may have to pay for having an account, you should also consider the interest rates associated with loans or lines of credit offered by the credit union. While interest rates at credit unions are generally considered to be better than those offered by banks, it’s important to be clear on how interest is calculated and compounded to ensure that you’re getting the best deal on any money you borrow.

Making Sure Your Money Is Secure

Finally, you’ll want to make sure that your money is safe with the credit union you decide to join. Unlike traditional banks, credit unions are not insured by the Federal Deposit Insurance Corporation (FDIC). Credit unions are, however, eligible to seek federal insurance through the National Credit Union Administration (NCUA). (For more information about the NCUA, see Understanding The National Credit Union Administration And NCUA Insurance.)

The NCUA administers the National Credit Union Share Insurance Fund (NCUSIF), which is similar to FDIC insurance. Credit unions that participate in the NCUSIF are backed by the full faith and credit of theUnited Statesgovernment. According to the NCUA, approximately 98 percent of all credit unions in the U.S. are covered under the NCUSIF program. As of July 2010, participating credit unions are covered for up to $250,000 per member. This covers all credit union deposits, including checking accounts, saving accounts and certificates of deposit (CDs).

Making the transition from a traditional bank to a credit union takes patience and planning, but the end result can reap big rewards. In addition to potentially saving money on loans, insurance and other financial products, you may find that the more personalized approach offered by many credit unions is well worth the effort.


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