A few days ago, I was talking to a small group about some articles, that I am doing on how people are ditching large banks in exchange for smaller local banks. One of them spoke up and proceeded to tell up about all the advantages of a credit unions. After listening to what she said, I wanted to find out how valid were her points about credit unions.
The result of my research lead me to find 7 overwhelming reasons to put my money in a credit union as opposed to a bank. Those 7 reasons are what I have listed below.
Lower Fee – Since credit unions are member owned any profit gets distributed to the members in the form of dividends. This results in lower fee for overdrafts combared to non-credit union.
Non-Profit – The non-profit status helps explain why interest rates tend to be significantly better, and fees fewer and smaller, at credit unions than at large or small banks.
Tax Exempt Status - President Franklin D. Roosevelt signed the Federal Credit Union Act back in 1934. Since that time credit unions are exempted from most state and federal taxes. This puts regular banks at a definite disadvantage.
Serve a Small Group of People - Credit unions, as opposed to banks, are designed to serve a particular group of people or neighborhood. People who use credit unions for their financial services are members of that credit union, rather than customers.
Insured – Like banks credit unions are insured by the National Credit Union Administration. Through the NCUA deposits insured up to $250,000.
Board of Directors Elected Not Hired – Since a credit union is democratically controlled by that credit union’s members, the board of directors is elected by the member. This means that members have more to say in how the credit union is run. A depositor a credit union has decision making power. Members elect a Board of Directors as opposed to a bank which hires theirs.
Offered Services – In times past credit unions have not offered the same or as many services as large credit unions. Thanks to technology this is not true. What ever service you find a big bank, you will most likely find it at a credit union.
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I enjoy visiting daily to see your musings. I have your page bookmarked on my daily read list!