Are Credit Unions Better Than Banks?

Many people have become fed up with banks’ behavior and fees. A large number of people have been looking into alternatives. Banks seem to be losing popularity with more and more people looking into credit unions each year. However, are credit unions really offering you the best rates and the best services?

What is a Credit Union?

Credit unions are financial co-operatives that are owned and controlled by the members of the union. There are no shareholders with a credit union taking any cut and credit unions work to specifically benefit the credit union members. Credit unions are popular for their savings accounts and low loan rates on cars and mortgages. They were originally meant for people who shared a “common bond,” meaning they lived in the same area or worked for the same company. However, in recent years, credit unions have opened up to servicing just about any group of people.

Credit Unions are Great for Saving

If you are looking for a savings account, you may want to take a closer look at credit unions. In fact, the majority of unions pay out 2.5 percent gross dividend or more on their savings accounts, which is much better than your standard bank savings account. In addition to opening up credit unions to a wider variety of people, they’ve also changed the way they “multiply” your money. You can open an account that pay out dividends or pay out interest on your savings, which is very different from a “normal” bank.

Looking to Borrow?

Taking out loans is extremely easy and user-friendly through credit unions as well. When you take out a loan through a credit union, they obviously take a look at your credit score. They won’t, however, turn you down or hike up your rate automatically. After taking all of your income into consideration, the credit union may also expect you save within their institution prior to taking out a loan. Credit unions don’t have any hidden fees or costs, and they also won’t penalize you for paying the loan back early. In addition to those great perks, many credit unions also offer free life insurance for their customers, so in the event of your death, your loan will be paid off. Getting a loan from a credit union doesn’t mean it has to be huge amounts of money either. Actually, most credit unions will allow small loans for up to a year.

There seem to be credit unions popping up all over the United States, and many people are taking closer looks at them. There’s no wonder why either. With the borrowing regulations and payouts on savings accounts that credit unions offer, they are becoming much more popular than the regular run-of-the-mill bank.

Many people are switching their funds over to credit unions. If you are interested in opening a credit union account, check at a location near you and see if they can service your banking needs.