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Nine Things to Know About Banking with a Credit Union

In an effort to save money on fees and support local institutions, millions of Americans—96 million to be precise—are turning to credit unions for their banking needs. Roughly 700,000 people joined credit unions in the first quarter of 2013 alone. 
Like banks, credit unions offer checking accounts, make loans, and have ATM and online access. But credit unions are not-for-profit organizations that exist to serve their members rather than to maximize corporate profits.

“Credit unions are very unique institutions because we’re owned by our member-owners. What’s different from a bank is that there are no shareholders at credit unions,” says Paul Gentile, executive vice president of the Credit Union National Association, a trade association for the credit union system. “That means the credit union doesn’t have to try to drive high profits to raise shareholder value or to have a strong stock price.”
“That’s a powerful proposition today,” Gentile believes.
“At a credit union, the money goes back to the membership in better rates and lower fees.”
Switching to a credit union doesn’t need to be an all-or-nothing proposition, says Greg McBride, senior financial analyst for
“We’re not talking about severing a relationship completely with your existing financial institution,” he says. “You can often get the most bang for your buck by having a checking account at a credit union or local bank where the account is free and having your savings account with an online bank where you can get a better return. You can utilize the advantages of both and avoid any disadvantages.”
If you’re considering opening an account with a credit union, here are nine things to know:

1. Fees and loan rates at credit unions are generally lower, while interest rates returned are generally higher than banks and other for-profit institutions, according to

2. Membership is typically based on one’s employment, community, or membership in an association or organization, but eligibility might be broader than you’d expect. Community credit unions are open to those who live, work, or worship in a particular community. CUNA created to help people find a credit union near them. “You can’t join every credit union, but there’s certainly a credit union you can join,” Gentile says.

3. Through the CO-OP ATM Network and CO-OP Shared Branching, credit unions have joined together to offer widespread access to no-surcharge ATMs and credit union branches across the country. The CO-OP ATM Network has nearly 30,000 surcharge-free ATMs, more than 9,000 of which take deposits. ATMs with the triangle CO-OP logo can be found at many big box stores around the country.

4. The CO-OP Shared Branching network enables members to conduct business nationwide at 5,000 participating credit union locations.

5. Much as deposits at banks are insured through the FDIC, the funds of all federal and most state-chartered credit union members are insured up to $250,000 per individual depositor through the National Credit Union Share Insurance Fund (NCUSIF).

6. While credit unions may not have the same deep technological resources as banks, they offer online banking and other tech-friendly options like remote deposit capture (taking a photo of a check on a smartphone and depositing it that way). “People may think credit unions aren’t as tech-savvy as banks, when in fact they really are,” Gentile says, adding that the first financial institution to ever offer online banking was a credit union in the early 1990s.

7. Credit unions offer a full product suite, including mortgages, checking, credit cards, and CDs, though their offerings may not be as varied as those at banks.

8. Low-income credit unions provide financial services at reasonable rates in areas that are often underserved by banks. They also offer financial literacy workshops and credit counseling to help members get their finances back on track.

9. Because banks are often much larger than credit unions, banks can offer more loan and investment options, with robust online banking and customer service. Banks have “broader product lineups that can be desirable for more of a high-net-worth or more sophisticated individual who has a lot of varied financial needs and likes the convenience of having everything under one roof or having one point of contact,” McBride says.

As services at credit unions can vary, research your options carefully. If you need local access, ask if the credit union is part of the shared branch network. If you need online services, you may want to make sure it has a full suite of online options. You can learn more about credit unions at

The credit union is federally insured by the NCUA. Additional insurance of up to $250,000 on your savings accounts is provided by Excess Share Insurance Corporation, a licensed insurance company.
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