Most people don’t really give much thought to credit unions. Some may ask how they differ from traditional banks such as Citi, Wells Fargo, or Chase. Credit unions are different from traditional banks in that they are not-for-profit organizations and their board consists of elected volunteers, which are also members. Money that is invested is loaned out, at interest, to other credit union members.
Credit unions are geared to attract certain clientele. Membership is based on geographic location, occupation, etc. Because credit unions are nonprofit organizations, they are able to offer higher interest rate returns to its members on their savings or checking accounts. They are also able to offer business or home loans to members who wouldn’t normally qualify at a traditional bank.
Is your money safe in a credit union? Yes, credit unions are insured by The National Credit Union Administration (NCUA). The NCUA is an independent federal agency that charters and supervises federal credit unions. Look for the official NCUA blue-and-white sign to find out if your credit union is insured.
Credit unions are all about its members, and offer better rates and lower fees. Traditional banks offer the same services but usually at a fee. Traditional banks have shareholders they must appease as to where credit unions’ shareholders are its members.
In today’s economy, people are losing their jobs and a lot of what they worked hard for. They do not want to worry about bank fees. Credit unions usually offer free checking and/or savings accounts. They also provide the same services such as direct deposit, electronic banking, ATMs, overdraft protection, and loans.
When investing with anyone, there is always a risk, but you can assure that investing with a credit union is a safe and smart choice.
Contact Us
To find out about investments and other financial services, contact VFCU at their Brownsville credit union branch at (956)546-3108, or their Harlingen credit union branch at (956)425-5668.
FAQs
Because credit unions are nonprofit organizations, they are able to offer higher interest rate returns to its members on their savings or checking accounts. They are also able to offer business or home loans to members who wouldn't normally qualify at a traditional bank.
What is the downside of banking with a credit union? ›
Credit unions tend to have fewer branches than traditional banks. A credit union may not be close to where you live or work, which could be a problem unless your credit union is part of a shared branch network and/or a large ATM network such as Allpoint or MoneyPass. May offer fewer products and services.
Is it better to keep your money in the bank or credit union? ›
Statistically, personal savings accounts from Credit Unions fare better than accounts in major banks. Grow your money faster with a Value+ Money Market account, or a share certificate.
Can credit union make you money? ›
Credit unions are not-for-profit organizations. While a credit union may earn profits, those profits are funneled back into business operations, paid to members as dividends or used to offer additional benefits for members.
How safe is your money in a credit union? ›
Just like banks, credit unions are federally insured; however, credit unions are not insured by the Federal Deposit Insurance Corporation (FDIC). Instead, the National Credit Union Administration (NCUA) is the federal insurer of credit unions, making them just as safe as traditional banks.
Why don t credit unions make risky investments? ›
Since credit unions don't have shareholders to appease, their primary objective is to offer the best financial services to their members at the lowest possible cost. As a result, credit unions are less likely to take on risky investments that could jeopardize their financial security.
Should I move all my money to a credit union? ›
What Are the Major Advantages of Credit Unions? Credit unions typically offer lower closing costs for home mortgage loans, and lower rates for lending, particularly with credit card and auto loan interest rates. They also have generally lower fees and higher savings rates for CDs and money market accounts.
Who is the best credit union to join? ›
The wide field of membership makes it possible for almost anyone to join, even if they don't work in technology.
- Consumers Credit Union: Best for deposit account variety. ...
- America First Credit Union: Best for low share balance. ...
- Quorum Federal Credit Union: Best for ATM access.
Federally insured credit unions and banks are both safe places to keep your money. The National Credit Union Administration protects deposits (within certain limits) at insured credit unions and the Federal Deposit Insurance Corp. protects deposits (within certain limits) at insured banks.
Who profits from a credit union? ›
Credit unions operate to promote the well-being of their members. Profits made by credit unions are returned back to members in the form of reduced fees, higher savings rates and lower loan rates.
The main benefits of a credit union vs. a bank are that credit unions tend to offer better rates and customer service, lower fees, and a national network of ATMs. However, a bank may offer more branches and products than a credit union.
Do credit unions increase credit score? ›
Does joining a credit union build credit? Joining a credit union can help build credit, provided you follow the right steps. For example, if you join a credit union with bad credit, you may want to consider getting a secured credit card to improve your credit score. This is also an option if you're new to credit.
What is an advantage and disadvantage of a credit union? ›
So, get comfy. This is going to be a comprehensive look at credit unions': Upsides, such as better rates, more favorable terms, superior service, and fewer fees. Downsides, like more limited accessibility, finite eligibility, and narrower product and service portfolio.
Can the government take your money from a credit union? ›
Through right of offset, the government allows banks and credit unions to access the savings of their account holders under certain circ*mstances. This is allowed when the consumer misses a debt payment owed to that same financial institution.
Can you save money in a credit union? ›
A savings account, also called a “deposit account,” is available from credit unions, banks, and online financial institutions. Savings accounts typically pay interest on the monthly balance with tiered levels of interest, so the more you save the more earned interest you'll receive.
Are credit unions safer than banks during a recession? ›
bank in a recession, the credit union is likely to fare a little better. Both can be hit hard by tough economic conditions, but credit unions were statistically less likely to fail during the Great Recession. But no matter which you go with, you shouldn't worry about losing money.
