You have probably heard about credit unions, but do you really know what one is? Most people in the Northlake area know they are kind of like a bank, but there are some big differences, too.
What’s a Credit Union?
A credit union is a financial institution, similar to a bank, that is run as a not-for-profit business. It is owned by the members who keep their money there. The services available are similar to a bank, but any profits that are made are given back to the members of the credit union. Thus, credit unions often have cheaper rates and lower fees than banks do. Not everyone can join a credit union, however. Most have membership requirements that are based on things like associations, residency, play of employment, or even place of worship.
How a Credit Union Works
A credit union works by helping all of its members thrive financially. All people who have money in a credit union are eligible to vote on issues and can be elected to the organization’s board of directors. Some credit unions are easier to join than others, and if you qualify, you typically have to pay a fee and make a deposit into an account. Remember, though, as a member you also benefit from the profits, which come back to members in the form of better rates, higher returns, and even educational programming to boost your financial status.
Other Things to Know About a Credit Union
Some people believe that you can only be a member of a bank or only be a member of a credit union. This isn’t true. Many people have accounts at banks and credit unions. Some people also believe that money kept at a credit union isn’t insured, but this isn’t true either. A good credit union is always ensured by the National Credit Union Administration.
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