Where should you keep your money? That’s a simple question but one that’s not asked frequently enough because there are many options. Ideally, we would all have accounts with institutions that don’t charge too much and provide us with the financial tools and guidance we need to achieve our financial goals.
At Leaders Credit Union, we understand that you have choices and that’s why we pride ourselves on providing a safe place for you to keep and grow your money. One of the most common questions we hear is what to look for in a credit union. With that in mind, here is our complete overview of how to find the credit union that’s right for you.
How is a Credit Union Different from a Bank?
Although credit unions and banks provide most of the same services, there are some significant differences that we want to highlight.
Not-for-profit vs. For-profit
The first key difference between credit unions and banks is that credit unions operate on a not-for-profit basis, while banks operate on a for-profit basis. The members of a credit union are also its owners, which means that any financial advantages accrue to the members and not to a board whose only goal is to make money for themselves.
The not-for-profit status of credit unions translates to generous dividends on savings, low interest rates on loans, and low fees in general. Any money a credit union earns is returned to its members in some way, and that’s not what you’ll find at a bank.
NCUA vs. FDIC Insurance
Both credit unions and banks have federal insurance protection for account holders, but through different institutions. Credit Unions are insured by the NCUA through the National Credit Union Share Insurance Fund (NCUSIF) while banks are insured by the Federal Deposit Insurance Corporation (FDIC).
Both organizations insure accounts up to $250,000 per depositor, so your money will be protected in either case. However, it’s important to note that not all credit unions are insured by the NCUSIF. You should make sure to check before you join.
Membership Requirements
Provided that you’re over the age of 18 and have ID, you can open an account at a bank. Banks don’t require you to be part of any community or profession to open an account because for the most part, they aren’t community-based businesses.
That’s not the case with credit unions. Credit unions all serve a designated population. For example, Leaders Credit Union serves the hard-working people of communities in West Tennessee within various fields of membership. Being part of the communities we serve is an honor.
Personalized Care
Credit unions are owned by members, and that means that credit union employees are there to help every member achieve their financial goals. They’re happy to provide personal attention, advice, and resources.
What Should You Look for in a Credit Union?
Now, let’s talk about some of the characteristics you should look for when you’re trying to find a credit union.
Rates and Fees
As we mentioned above, the rates and fees charged by credit unions tend to be significantly more advantageous to account holders than what you would find at banks. The right credit union for you will provide higher-than-average payouts on savings accounts (and some checking accounts) in the form of dividends.
You should also expect to find lower-than-average interest rates for loans and lines of credit as well as low or no-fee checking and savings accounts. The NCUA tracks and compares interest rates. As an example, the average bank rate for a 48-month car loan in December of 2022 was 5.45%, while the average credit union rate was only 4.61%.
Technology and Financial Tools
There is a common misconception that only large banks have money to invest in financial tools and technology. Many credit unions understand that prospective members value convenience and accessibility. We suggest looking for a credit union that has a member-friendly website with useful features like online banking and a robust mobile app.
At Leaders Credit Union, we offer our members online banking, a free mobile app, and an array of financial tools, such as calculators and budgeting tools, to help them manage their money and achieve their financial goals.
Customer Service
Member service is a priority for credit unions, and you should look for a credit union that provides top-notch member service. Specific member service features to look for may include the following:
- Live chat and online support
- Mobile support
- Phone support
- Multiple, accessible branches
- Personalized financial guidance
- Personalized investment services
- Guided wealth portfolio
Think about your financial goals and choose a credit union that provides the services you need to pursue them.
Financial Tools
Online banking with credit unions typically comes with access to a broad array of financial tools. For example, you may find a selection of calculators to help you pay down your credit card debt, determine your monthly mortgage payment, or create a household budget.
Leaders Credit Union offers the following tools to help our members:
- Calculators to help with saving money, estimating loan payments, and more
- A budgeting tool to help you create a realistic household budget
- A money management tool
- Our Freedom Path financial education program
- Our iGrad program for recent college graduates
You can learn which financial tools are available by exploring credit union websites. We suggest looking for a credit union that prioritizes financial education for members and makes it easy to learn about money management and other important topics.
Community Service
Credit unions tend to take an active role in the communities they serve. They support charities in their communities, partnering with them to raise money and awareness to help those who need the most assistance.
They may also offer community-oriented programs. At Leaders Credit Union, we honor Community Champions who serve the same communities we do. We also offer scholarships through our Leaders Education Foundation. It can be inspiring to find a credit union whose values align with yours.
Branches and ATMs
Accessibility and convenience are essential when pursuing short-term and long-term financial goals such as buying a home or planning for retirement. Your money should be easy to find and so should the services you need to manage your money effectively.
The right credit union for you will have multiple branches and a wide network of ATMs, so you won’t get stuck paying ATM fees. Leaders Credit Union members get access to more than 85,000 fee-free ATMs and more than 5,600 shared branches across the country.
NCUSIF Insurance
We mentioned above that most credit unions have insurance protection through the NCUSIF. Before opening an account with any credit union, you should confirm that they are part of the NCUA and that members’ accounts are insured by the NCUSIF.
While most credit unions are covered, not all are. You should be able to find this information on the credit union’s website.
Flexibility
In addition to typically offering lower fees and more advantageous rates than banks, credit unions also offer members more flexibility than is typically found at banks.
For example, you may be able to get a credit card or qualify for a mortgage even if you have a less-than-ideal credit score. Many credit unions will work with you by extending a secured loan or credit card to help you build or rebuild your credit. Since the goal is to promote the financial health of all members, it’s often far easier to get the assistance you need at a credit union.
Membership Requirements
Credit unions are community-based organizations and membership is not open to everybody. Each credit union has its own requirements for membership and provided you meet them, you can open an account.
At Leaders Credit Union, we serve communities and workers across West Tennessee. If you work for one of our Select Employer Groups or if you live, work, attend school, or worship in Madison, Chester, Dyer, Haywood, Lake, Lauderdale, or McNairy Counties in Tennessee, Crittenden County in Arkansas; or in certain parts of Carroll, Crockett, Fayette, Gibson, Hardeman, Henderson, Henry, Shelby, Tipton, and Weakley Counties in Tennessee, we would be happy to welcome you as a member.
Member Benefits
Finally, many credit unions offer special membership benefits that go beyond affordable fees and generous dividends. These may include things like our membership appreciation days and attending our annual meeting.
Member benefits are a perk on top of the many other advantages to choosing a credit union instead of a bank. You’ll have access to the kind of personalized attention you deserve—something that’s simply not available at most banks.
Join Leaders Credit Union Today
Credit union membership offers individuals and businesses the opportunity to keep their money in their communities while reaping the many advantages of being an owner instead of a customer. The qualities we’ve listed here will help you understand what to look for in a credit union and choose the right credit union for your financial needs.
Do you live or work in one of the communities we serve at Leaders Credit Union? If so, we hope you’ll consider joining us! Read about our membership benefits—and when you’re ready to make the switch, follow the steps in our free guide to switching your primary checking accounts.
