A credit union is a type of financial institution that works differently from a traditional bank. Here are the basics of credit unions.

Credit Union

A credit union is a financial institution that allows individuals to join as members. Some credit unions are designed to allow certain individuals to join because they are members of an organization or they work for a certain employer. Many large employers offer credit unions as a benefit to their employees.

The credit union will offer loans with the money that was deposited by credit union members. Credit unions typically have all of the same products and services that you can find at a bank, such as checking and savings accounts.

Advantages

Credit unions are considered nonprofit organizations. Because of this, they do not have to pay taxes, and they can provide lower interest rates and fees to their customers. Most of the time, credit unions are going to have lower rates than any other lender around.

When you are a member of a credit union, you are going to be considered one of the owners. You will receive a portion of the profits generated directly into your account. You are also going to be able to vote on important matters such as who sits on the Board of Directors.

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