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If you’ve toyed with the idea of joining a credit union because you think you and your money might be better served, you might be right.
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“We are now facing inflation rates not seen in decades,” said Cyndie Martini, CEO and President of Member Access Processing. “Now, more than ever, we need our money to work smarter for us – and that’s not in a bank.
“We all know that the historical reason for going to a bank was the convenience of having more branches. But the pandemic has taught us that we can do almost any banking activity online. From now on, the need for bank branches is less than ever. Smart consumers are turning to credit unions.
Of course, just like banks, not all credit unions are created equal. So before you commit to joining, it’s important to do your research on the best credit unions. However, before you do, here are nine reasons why you should consider joining a credit union to help you decide if it’s the right financial decision for you.
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They belong to their members
“Credit unions are not-for-profit financial cooperatives and answer only to their members, which means no outside stakeholders are involved,” said Steve Sexton, personal finance expert and CEO of Sexton. Advisory Group. “Cooperatives are controlled by their members and always operate in their best interests. As not-for-profit organizations, credit unions do not make risky investments or pressure their members to sign up for certain accounts or services. »
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Their customers are not just members, they are stakeholders
“Banks operate to generate revenue for their shareholders,” said Ahren Tiller, founder and supervising attorney of the Bankruptcy Law Center. “On the other hand, credit unions are member-owned, so in a credit union you are not just a member, but also a stakeholder. If you have $20 in your account, you have the same voting rights as someone who has $20,000 in their account. This means that as long as you are a member, you have a say in deciding the direction of the union.
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They offer personalized services
“They are able to offer more personalized services where members can feel their concerns are addressed quickly and thoroughly,” said Erin Ellis, Certified Financial Advisor at Philadelphia Federal Credit Union. Some of these services may include:
- Financial literacy programs, events and seminars that can help you take control of your finances and grow your money
- Tools to help you calculate mortgages and investments and create savings plans
- Advice on important financial matters to guide you in making the right financial choices
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They are as safe as banks
“Credit unions are safe because they are backed by the National Credit Union Share Insurance Fund (similar to the FDIC), which insures member credit union accounts for up to $250,000,” Sexton said.
They offer higher savings rates than the big banks
“Credit unions pass on more of their profits to their members,” said Steffa Mantilla, Certified Financial Education Instructor and CEO/Founder of Money Tamer. “That means savings accounts and CDs will have higher savings rates than you can find at big banks.”
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They usually offer better loan rates than banks
“Credit unions generally have lower interest rates on loans,” said Molly Ford-Coates, Certified Financial Advisor (AFC®) and founder and CEO of Ford Financial Management. “Having a lower interest rate means you’ll pay less over the life of the loan.”
They don’t focus on fees
“When money has less value, customers can’t afford to give money away or make it earn less,” Martini said. “Credit unions offer lower fees and lower or no ATM fees.”
And bank charges can really add up. According to Forbes Advisor’s 2021 Survey of Current Account Fees, monthly maintenance fees average $5.14 across all financial institutions, with credit unions charging among the cheapest, if at all . And the average fee for an out-of-network ATM is $1.77, but many credit unions either don’t charge this fee or refund a certain number of transactions each month.
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They work with people who have credit problems
“Joining a credit union is fantastic for people with low credit because they are more likely to accept someone in that situation and still offer a good interest rate or APR on a loan” , said Jenna Carson, financial partner at Money Lucid. “That’s a fantastic benefit that a bank just won’t give you.”
They work with small businesses
“If you’re running a small business, credit unions have more flexible terms,” Mantilla said. “They will work with you to give you a loan or an advance where a big corporate bank wouldn’t. Credit unions have the opportunity to help small businesses that big banks would miss. »
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