What It Takes To Open a Credit Union Account
Credit Union
In the United States, credit unions have been great alternatives to banks for many decades.
The key difference between these two financial institutions can be found in their organizations and tax reporting status.
Banks are for-profit institutions while credit unions are not; another major difference is that the latter operates on a membership scheme, which means that credit union members have a vote whereas bank account holders do not.
There are various reasons why you should consider joining a credit union; let’s go over the process of opening an account and why you may give these institutions preference over banks.
Choosing the Right Credit Union
There needs to be a common bond between you and the members of the credit union.
In many cases, you may only need to be a resident of the geographic region served by the credit union.
In other cases, you may need to work in a specific professional field or belong to an employee association.
Veteran status and governmental association are often common bonds in this regard.
Being a relative of an existing member may also qualify you.
Browsing the Financial Services Provided
Not all credit unions offer the same services or benefits. If you are specifically looking for an auto loan, be sure to inquire about this type of financing.
Some credit unions offer great mortgage options, but they may be limited to certain geographical areas.
Not all unions will offer credit cards. In general, most credit unions will provide you with basic personal banking tools such as direct deposit, transfers, online bill payments, and access to automated teller machine networks so that you can withdraw cash or make retail purchases.
The Cost of Joining a Credit Union
It does not cost much to join a credit union, but you need to understand the value of a share in the organization.
Many of these institutions charge $5 per share; this is not an amount that you should expect to see in your deposit account balance; however, it gives you the right to vote on certain governance matters when they come up for evaluation and criteria.
You can also expand your research to see if there are incentives to join at certain times; for example, some credit unions will gift new members with $15 in their accounts upon joining.
Identity and Common Bond Verification
You will need to provide documents to ascertain your identity and the factors that make you eligible as a member.
This process may require you to provide copies of identification cards, military discharge papers, diplomas, or others.
In the end, you may be surprised by the benefits offered by credit unions when compared to banks. Since these are non-profit institutions, they are often able to provide loans at lower interest rates.
Category: Banking
