If you belong to a large organization such as a labor union, work for a big corporation or live in a close community, you might find that one of the services your community or affiliation offers you is a credit union. Credit unions are very similar to banks, except they are cooperatives that are controlled by the people who use its services.
Credit Unions Provide Most Bank Services
One of the ways that credit unions are similar to banks is that they provide a host of banking services. Some of the banking services that credit unions usually provide are online banking, the ability to open a savings account and checking account, the ability to apply for loans and mortgages, debit cards, ATM cards, etc. Pretty much any service that a bank can offer, a credit union can offer as well.
It should be noted that your money is safe with a credit union, just as it is with a bank. Credit unions have oversight and extremely strict conditions of operation, similar to a bank. Saving or investing your money with a credit union is extremely low risk and for the most part and excellent way to grow your savings for the long term.
The Difference Between a Credit Union and a Bank
The difference between a credit union and a bank is that the people that use a credit union are the ones that control it. This means that in most cases banking fees are much lower or non existent. For instance, it might cost you $20 to stop payment on a check in a bank, where at a credit union it would be free. In addition, where a bank may charge you $30 per month for a checking account, a credit union may charge only $5.
Lending Money from a Credit Union
Lending money from a credit union is also a major reason many individuals and families choose to join. Since a credit union is a cooperative and a community, it many cases it can be easier to lend money. Where as a bank is a for profit institution and usually concerned with the bottom line, a credit union can help individuals that would like to take out loans for a car, house, etc by offering extremely competitive rates and less fees. For people on a tight budget, the difference between these rates and fees from a traditional bank makes it possible for them to purchase a home with a mortgage.