Have you heard of credit unions? Are you a member of one? These are not-for-profit financial institutions similar to commercial banks owned and controlled by their members. With regular monthly savings, the members pool funds, subsequently accessing competitive credit rates, lower fees, and improved services. Through the cooperative financial model, members can access the following services; deposit accounts, credit facilities, and other financial products. The income generated is used to fund community-based projects and services that interest the members while paying annual dividends based on their total savings.
Traditionally, membership to a credit union was limited to people with a common bond such as those working at the same company, similar industry, or shared business interests such as dairy farmers. Have you ever asked yourself, how do I find a credit union near me ? You become a member and shareholder by opening an account and starting your journey through a deposit.
Once you become a member, you enjoy numerous benefits that we will explore further.
SERVICES OFFERED BY CREDIT UNIONS
Being a member of a credit union means you get to participate in the activities of the cooperative such as voting for the board of directors where each member gets an equal vote as per the principles of credit unions. The following are some of the services offered by credit unions to both individuals and companies;
- Saving and investing – A major aspect of credit unions is encouraging members to make regular savings to enable them to reach both long-term and short-term financial goals. The savings are referred to as shares that not only earn members a dividend at the end of the financial year but also facilitate access to loans and other credit facilities.
- Checking accounts – Cooperatives offer a variety of checking accounts similar to commercial banks that attract minimal operating fees to enable you to manage your income efficiently and effectively whether paying bills or buying goods.
- Money market fund – This is a low-risk, low-volatile investment that offers members convenient access to their funds and a higher return on deposits. The guarantee of a higher return and easy access to your funds gives an assurance on your return on investment.
- Retirement accounts – Credit unions offer individual retirement accounts (IRAs) that allow you to save for retirement with special tax benefits once you stop actively working. You can select from a variety of options including; traditional, Roth, or a simplified employee pension.
- Student accounts – This option enables younger members to learn how to manage their finances responsibly while planning for their future. The convenient and affordable accounts have multiple benefits such as; a permissive fee structure and campus card deals. It always pays to start their financial management education early on in life for guaranteed success later on in their life.
- Mortgage and Auto loans – Investing in a home or a vehicle is a major life decision and can have a significant impact on your budget. Cooperatives offer a variety of loan options at competitive rates to help finance your dream car or home with manageable repayment options.
- Consumer loans – Personal loans offered by credit unions come in handy when you’re cash-strapped and in need of credit. These loans are low, fixed-rate with flexible monthly repayments.
- Home equity loans – This is a type of consumer debt where you borrow against your home’s value. If you are already financing a mortgage, this can be considered as a second mortgage where the loan amount is computed as a difference between the home’s current market value and the mortgage balance due. Cooperatives offer some of the competitive market rates to finance some of your big life expenses through equity financing.
- Money transfers – These are services intended to fulfill your financial transactional needs to friends, family, and businesses. Credit unions offer customers more competitive transaction rates compared to commercial banking costs enabling them to manage their expenses.
- Secured loans – This is a credit facility fully secured by your shares and offered at a lower rate. Different from traditional commercial bank secured loans that require collateral such as land or motor vehicles. Credit unions enable you to borrow against your savings, therefore, providing an efficient method to access credit without the unnecessary red tape associated with traditional commercial bank loan applications.
- Credit cards – This is a payment card that fits your lifestyle while enabling you to make payments both locally and abroad. They range from; standard, gold, and platinum MasterCard options to help you manage your expenses.
- Debit cards – These allow you to access your funds from numerous ATMs and also make purchases. For youth, it facilitates spending management since the amount spent is tied to their savings. Debit cards offer great functionality and security whenever you transact.
- Safety deposit boxes – This is a great service offered by credit unions to securely store your valuables at a safe location outside your home. They can be rented for your total lifetime with the cooperative at an annual fee making it financially manageable and giving the assurance that your valuables are secure.
- Online and mobile banking services – These are efficient services offered by credit unions to conduct financial transactions, check your account balance and use other services. The convenience offered by these services enables you to focus on your other obligations making you more productive by enabling you to direct your energy to your work and family.
Credit unions offer more or less the same services as commercial banks. However, whereas cooperatives are member-owned, commercial banks are owned by a small group of shareholders who determine the board of directors. Additionally, credit unions exist to improve the financial well-being of the members where service rates reflect this. On the other hand, banks exist to maximize shareholder profits and service charges reflect this. It’s important to consider when researching financial institutions to manage your hard-earned money. The services are not only affordable but also enable you to join a group of individuals with similar interests looking to grow and develop their financial health.