First things first, what is a credit union?
If you’ve never been a member of a credit union, you may be wondering what a credit union is. You’re probably aware that a credit union is a financial institution, but you may not know that a credit union is actually a financial cooperative. So what does that mean? It means it’s owned and controlled by the people who use it, its members (more on the importance of the “member” later; it definitely makes a difference).
It’s also good to know that a credit union is a not-for-profit organization, so instead of trying to maximize its profits for shareholders, it is able to pour its profits back into high-quality products and services with better rates and lower fees. We’ll talk more about the wide range of products and services available at a credit union in just a bit.
So, how do I become a member of a credit union?
You may have heard that credit unions are for employees of specific companies. That was more often true in the past, though it still is occasionally true today. (For example, Avadian began as Alabama Telco Credit Union, serving the employees of the telephone company.)
Now, however, to be eligible for membership at Avadian, you simply must live, work, worship, or go to school in one of the following counties: Autauga, Baldwin, Blount, Calhoun, Cherokee, Coffee, Colbert, Cullman, Dallas, DeKalb, Elmore, Etowah, Geneva, Houston, Jackson, Jefferson, Lauderdale, Lawrence, Lee, Limestone, Madison, Marion, Marshall, Mobile, Montgomery, Morgan, Pike, Randolph, Shelby, St. Clair, Talladega, Tuscaloosa, Walker, or Winston.
However, if you do not live, work, worship, or go to school in one of the above counties, you may be eligible through more than 600 employers who participate as an Avadian Select Employee Group (SEG). To see the full list of companies, click here.
You are also eligible if you are related (whether by blood or by marriage) to any Avadian member.
Will I have access to fewer products and services than at a bank?
Another common misconception about credit unions is that they are too small to offer the same products and services as banks or the same conveniences. We think you’ll find that credit unions, and Avadian in particular, offer the products, services, and conveniences you need that will rival any other financial institution.
To see a full list of Avadian’s offering, check out our website.
Is my money safe at a credit union?
Now that we’ve gotten the short answer out of the way, we’ll expound a bit. You’ve probably heard of the FDIC. Well, the NCUA is similar. It stands for National Credit Union Administration, and it is backed by the federal government. What it means for you is that your accounts are insured for up to $250,000 per qualifying account.
But Avadian goes one step further – and it’s a pretty big step if we do say so ourselves. Avadian is one of a few credit unions in the state to carry additional deposit insurance through Excess Share Insurance Corporation, a licensed insurance company. No banks offer extra deposit insurance. Through it, all deposit account relationships are insured up to an additional $250,000. All of this insurance is available without any additional cost to you.
Why do you say “member” and not “customer”?
We promised we’d get to this, and here we are. It may seem like a distinction that doesn’t really make a difference, but it matters. A lot. At a credit union, you’re a member of the financial institution, not a customer. When you make your initial $5 deposit to become a member, you become part-owner in the credit union. You are a shareholder. And contrary to a bank, where you have no say over how things operate, at a credit union, members get to vote on, and can even serve on, a volunteer Board of Directors, which oversees the credit union’s operations. These elections take place at the credit union’s annual meeting.
But those aren’t the only differences between a bank and a credit union. A bank is beholden to the group of investors that own it and who expect a certain return on its investments. That typically means that banks charge higher fees and more (and higher) rates on loans to maximize the investors’ return. In contrast, the profits of a credit union benefit the members in the form of higher dividends and interest, lower loan rates, higher rates of return on savings deposits, and lower costs on services (sometimes as low as $0, which, you have to admit, is pretty low).
Ready to join?
Federally insured by 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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