What Do Credit Unions Do for Their Members?
What does a credit union do? Essentially, a credit union does everything that a bank does. Credit unions accept deposits, approve loans, provide credit and debit cards, and perform virtually any other service that you'd pursue at a bank. In fact, from the perspective of daily tasks, credit unions are virtually indistinguishable from banks. However, credit unions do have a different structure from banks, and that structure informs what they do. Apart from regular financial services, here's what you can expect from a credit union.
What's the biggest difference between a bank and a credit union? The ownership structure. While banks have customers, credit unions have members. Credit unions generally serve specific demographics. Some credit unions serve people from a specific region. Some serve people in specific professions. Others cater to military members.
Because they focus on specific demographics, credit unions can more effectively meet their members' needs. For instance, a credit union for rural areas may have a generous car loan program, since rural areas may not have public transportation.
Listening to Members
Credit unions also have a unique decision-making process. Banks may listen to customer input, especially when those banks are community banks with great customer service. In credit unions, however, members play a bigger part in all major decisions. That's because credit union members aren't just clients; They're part owners. In credit unions, members elect the board members who make decisions, and those board members listen to member input before voting.
Another big difference comes from the fact that credit unions are nonprofits instead of businesses. When a credit union makes money, that money must be reinvested back into the organization. What does this reinvestment look like? It depends on the credit union. Some credit unions will sponsor services like financial literacy classes. Others will broaden their daily services. In any case, the board will vote on the best ways to reinvest the funds.
Finally, credit unions offer their services at reasonable rates. It's another benefit of their nonprofit status. Loans and other products usually come with lower interest rates than you'd find at a bank. Often, savings accounts let you earn more interest than you'd earn at a bank, too.
How Can You Find the Right Credit Union?
Many people are switching from banks to credit unions these days. Finding the right credit union is easier than you might think. We've partnered with credit unions, local banks, and other financial institutions that put their members or customers first. Take a look at our database today and search based on your needs. You might find some great options that you would have otherwise missed.