Author: Paul Reimold

Having joined a credit union some 30 years ago, I can testify to their advantages and blessings.

Frankly I am totally mystified as to why anyone would keep their personal accounts at a traditional bank. I mean, are there really people out there who pay monthly fees for their checking accounts???  And are routinely charged for ATM withdrawals???  While getting next to nothing for interest on their savings accounts and CDs???

Perhaps you hesitate to join a credit union because of the perception that they have limited services and geographical reach. It ain’t so. Today’s credit unions are for the most part, indistinguishable from banks. They offer a plethora of conveniences: online banking, mobile apps, automatic bill payment and check deposits using your smart phone. Furthermore, credit unions accounts are insured up to $250,000, just like banks. (They have their own federal agency: National Credit Union Administration NCUA)

As far as geographical reach, if your credit union is part of the CO-OP ATM network, you have access to 30,000 fee-free ATM’s throughout the country – that’s a number of apocalyptic proportion. Similarly, the CO-OP shared branch network gives you the option of conducting in-person banking at over 5,000 locations nationwide.

Here are four compelling reasons why credit unions reside in a higher realm:

• Credit Unions are non-profit organizations owned by their depositors. Unlike banks, they are not beholden to Wall Street and the relentless pressure to increase profits and squeeze more revenue from each and every customer. In contrast, witness the recent Wells Fargo debacle.
• As a result, they charge no fees or lower fees. Free checking accounts are practically a given.
• Loans (auto, personal, home equity, mortgages) typically carry lower interest rates: (Note: I do not encourage readers of Frugal Wealthy and Wise to take out loans unless there is a good reason, no matter how low the interest rates happen to be.)
• Interest paid on savings accounts and CDs are generally superior to banks (but shop around).

So how do you join a credit union that will have you as a member? Once upon a time, membership in credit unions was restricted to employees and immediate family of a particular company, labor union, government agency, or non-profit organization. These limitations have largely been lifted. Some credit unions may still limit membership to residents of a particular geographic area. Others have no restrictions other than US citizenship.  You typically must deposit an initial $5 – $25 as a minimum balance to maintain your account– essentially a fee but money well spent, IMHO.

As enthusiastic as I am about credit unions, I exhort you to carefully shop for one that meets your needs and confirm that it is insured by NCUA. Also, there will be times when you find better deals on financial products at other institutions.

Downsides? I really can’t think of any. So if you are not currently banking at a credit union, this may be the appointed day and hour to show your finances a better way.

Cheers, Paul

P.S. I’d like to hear from you, dear readers, about your experiences with both credit unions and banks.

P.P.S. Here are links to find locations of Credit Union CO-OP ATMs and branches.

© 2016 Paul J Reimold

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