What Is A Credit Union?
A credit union is a financial cooperative, owned and controlled by the people who use its services. Credit unions call their owners “members.” That means that all of the money they make goes back to you, the members. It’s your money to begin with, and it’s pooled with the resources of all other credit union members.
Credit unions serve people who share something in common, such as where they work, live, occupational background, or church affiliation. Credit unions are not-for-profit and exist to provide a safe, convenient place for members to save money at higher rates of return, and to receive loans at reasonable rates. Most importantly, credit unions provide greater and friendlier service to the membership, as well as dividends.
Credit unions don’t have any outside stockholders. As non-profit organizations, credit unions are exempt from certain tax requirements. All of the money that’s deposited in accounts, all of the interest collected on our loans, every dollar that comes into a credit union stays with the credit union. That money is used to keep loan rates low and savings rates of return high.
This helps a credit union offer:
- A great rate on a Share Certificate of Deposit.
- Low or no fees on many financial transactions.
- Credit unions can focus on serving you, the member.
This lets credit unions maintain a bottom line of people, not of profits. Credit Unions are a great fit for life.
Credit unions, like other financial institutions, are closely regulated and operate in a very prudent manner. The National Credit Union Share Insurance Fund (administered by the National Credit Union Administration, an agency of the Federal Government), was created by Congress in 1970 and insures deposits of credit union members at credit unions nationwide.
