Nowadays, no one stores hordes of money under their mattress, but instead in a bank account. Most banks have many locations throughout a specified area, state, or even the nation. However, this isn’t the only option you have for saving money. Credit unions are also financial institutions, but unlike banks are non-profits and owned by the members. Learn about the top reasons to open a credit union account.
Joining Is Easy
While credit unions have some criteria that members must meet, they are generally very reachable. Most credit unions mainly require you to work or live in the service area and deposit a minimum amount which qualifies as the required “membership fee.” Best of all, most financial credit unions keep their applications simple and are always happy to help potential members sign up online or at one of their branches.
Lower Interest Rate
Throughout life, we all hit a point where we need to take out a large loan for a significant purchase, such as a home or vehicle. If you have a savings account at your credit union, you can apply for a loan. Why choose a credit union over a bank for your loan? Credit unions offer lower interest rates than the standard bank partially due to its not-for-profit status.
Higher Dividend Rates
These financial institutions also offer high dividend rates in savings accounts. This rate varies for each credit union. As a result, your money will grow over the years, even if you don’t make consistent deposits.
Moreover, the dividend rate often varies in specific accounts, such as a money market account with tiered interest. Money earned in this type of account is directly related to the amount deposited—the more you put into it, the higher your dividend rate.
Pro Tip
Since credit unions offer a higher dividend rate, many parents open accounts for their children to use the money for college or to buy their first car.
They Have Financial Resources
No matter how old or young you are, we’re always learning, and understanding finances is vital. Credit unions put their members first, and that means offering different educational resources to teach them about terminology and financial services. This also gives you expert advice on the types of accounts you should open, how to manage your money, and the importance of saving.
You Have a Say
The final reason to open a credit union account is that you have more control over your money than in a bank. Members own the credit union, and there are typically annual or quarterly meetings that you can attend to discuss the institution.
As a member of the credit union, you can also vote on which volunteers are on the board or run for a position yourself. This is important because you’ve entrusted your money here, and we all want control over our hard-earned cash.
