What Can You Expect as a Customer of a Credit Union?

A credit union is a financial institution, a not-for-profit cooperative, owned and controlled by its members. This fundamental difference sets it apart from traditional banks, which operate as for-profit entities primarily focused on generating earnings for their shareholders. Credit unions exist to serve the financial well-being of their members, rather than maximizing profits. Any surplus income generated by a credit union is reinvested back into the institution or returned to members in the form of reduced fees, more favorable interest rates on savings, and lower loan rates.

Membership and Cooperative Structure

Becoming a part of a credit union means joining a cooperative, making you a member. Eligibility for membership is based on a “field of membership,” which can vary but commonly includes shared characteristics like geographic location (living or working in a specific area), employment at a particular company, affiliation with an association or organization, or even family ties to an existing member. Once eligible, joining typically involves opening a share savings account with a small initial deposit. This initial deposit signifies your ownership stake in the credit union.

As a member-owner, you gain certain rights and responsibilities, including the ability to participate in the credit union’s governance. Members have voting rights, adhering to a “one member, one vote” policy, regardless of the amount of money held in their accounts. This democratic structure allows members to elect a volunteer board of directors, who are members. The board is responsible for guiding the credit union’s strategic direction and ensuring it operates in the best interests of its members, rather than external shareholders.

Range of Financial Services

Credit unions offer a comprehensive suite of financial products and services, similar to what you might find at traditional banks. Members can open various deposit accounts, including checking accounts for daily transactions and savings accounts for savings. Savings options extend to certificates of deposit (CDs), which offer fixed interest rates for a set term, and money market accounts, which typically provide higher interest rates than standard savings accounts and may include limited check-writing capabilities.

Beyond deposit accounts, credit unions provide a wide array of lending solutions. These commonly include auto loans for vehicle purchases, personal loans for various needs, and mortgages for homeownership. Many credit unions also offer credit cards with competitive rates and terms, as well as small business loans to support local enterprises. Additionally, members often have access to financial counseling services, which can assist with debt management, budgeting, and financial education.

Customer-Centric Approach

The operational philosophy of credit unions is customer-centric, due to their member-owned, not-for-profit status. Instead of prioritizing external shareholder returns, credit unions focus on the financial well-being of their members. This approach often translates into a more personalized service experience, where staff may take additional time to understand individual financial situations and offer tailored guidance.

This member-focused philosophy also extends to the financial benefits members receive. Credit unions commonly offer lower fees on services and accounts compared to for-profit institutions, as well as more competitive interest rates on savings products and loans. Loan terms may also be more flexible, and credit unions often provide financial education resources to help members make informed decisions and improve their financial literacy.

Accessibility and Operational Footprint

Accessing credit union services has evolved beyond traditional branch visits. While individual credit unions might have a smaller physical branch network compared to large national banks, this is often supplemented by extensive shared branching networks. The CO-OP Shared Branch network, for example, allows members of participating credit unions to conduct transactions at thousands of other credit union locations nationwide, as if they were at their home branch. This network provides access to many shared branches and surcharge-free ATMs across the country.

Digital services further enhance accessibility, offering members constant access to their accounts. Online banking platforms enable users to check balances, review transactions, transfer funds between accounts, and manage bill payments. Mobile applications provide similar functionalities, often including remote check deposit capabilities. These digital tools ensure members can conduct many banking activities conveniently from almost anywhere.