Benefits Of Credit unions
Credit unions are non profit financial institutions which are formed by a group of people that have a common bond. All members of credit unions combine their assets in order to provide credit and other monetary services to one another. Credit unions are quite different from other banks their motto and ownership. Banks and other financial institutions are owned by stockholders and are mostly controlled by remunerated boards. Whereas credit unions are cooperatives, which are usually owned by members themselves and run with a non profit motive. The unions are mostly operated by volunteer boards. Credit unions pay dividends to the members, offer them high savings rates, loans at low interest rates, and less service fees. The benefits of credit unions are as follows:
Banks and other financial institutions operate for profits and expect a return on investment when any member takes a loan. On the other hand, credit unions have no stockholders expecting a return on investment.
People working as board of directors for credit unions are elected by the members of the union and mostly work voluntarily. The credit union members elect the board members form among themselves.
3.Lower fee structure.
Credit unions have a comparatively low fee structure for all financial services, they provide to their members.
4.Inclusiveness to families.
Credit unions show inclusiveness towards the families of their members. They usually allow siblings, spouses, and children of the members to join the union.
5.Better interest rates.
Credit unions offer better interest rates to members as compared to banks and other financial institutions. Members get loans at lower rates and are offered higher interest rates on their savings accounts with the union.
6.Dividends to members:
In case there is an excess of funds with the union they are distributed to the union members as dividends.
7.Easy to join
The process of joining a credit union is quite simple and easy. The minimum balance required to be a part of such union is also less and can be afforded by all. There are various websites like Find a Credit Union, NCUA, and Credit Union National Association which can be surfed to search such unions. In addition, to this asks your employer, your spouse’s employer, and neighbors about their credit unions and you can join the same. The local government council is government body which can help you in this regard.
Unlike banks credit unions do not have many branches. So, while joining a credit union, consider factors such as location and convenience of going to that place from your office or home.