6 Things To Consider When Selecting a Credit Union

People think of two institutions for savings and investing: credit unions and banks. Banks are the more conventional option, but they do not offer as many advantages as credit unions.

Credit unions are community-focused institutions. Consumers who save and invest with a credit union have access to several features:

  • Lower fees 
  • Better interest rates 
  • Reduced loan rates 
  • Insured deposits 
  • Personalized customer service

Unfortunately, there are many credit unions, and not all meet quality expectations. When searching for a credit union worth joining, consider several factors.

1. Accessibility

Your primary financial institution should be local, with various ways of accessing it. A physical branch is always a plus, but ATMs, web access, and digital tools complement it.

Many credit unions provide online portals for clients. These portals offer 24/7 access to account information and FAQs. Additionally, many basic transactions are possible digitally through the portal space.

Having access to your information beyond operating hours is a plus. The ability to manage funds without interference is a preference for many clients. You will want to review accessibility features before committing to a credit union.

2. Fees and Interest Rates

Credit unions are typically competitive when it comes to rates and fees. Most programs will prove more advantageous than conventional banks. Still, the numbers will vary from one establishment to the next. One credit union might offer superior interest rates but high fees. The next establishment might offer smaller fees but not as good of interest rates.

It would be best to determine what you want or expect from a credit union. Find several financial institutions in your area and begin a list of pros and cons for each. You will probably stumble across a few that fit your preferences.

3. Insurance and Security

A conventional bank receives protection from the FDIC for up to $250,000 for deposits. Unfortunately, the FDIC has no jurisdiction over credit unions, meaning it does not offer the same protection.

Still, the lack of FDIC coverage does not mean credit unions are without protection. Credit unions receive the same level of insurance from the NCUSIF or the National Credit Union Share Insurance Fund.

Before signing up with any credit union, you should verify its insurance status. Federally insured credit unions will have displays in the location with initials like NCUA or NCUSIF. As insured institutions, credit unions are just as safe as any bank.

4. Membership Benefits

One of the main reasons to join a credit union over a traditional bank is the membership benefits. Benefits can include anything from easier loan approvals to referral incentives.

Benefits might be union-specific, meaning other credit unions might not offer the same. The best way to learn about member benefits is to search the credit union's website, or you can visit a branch.

5. Minimum Balance Requirements

Many credit unions will have a minimum balance requirement. If you do not maintain the required balance, you might be subject to fees or penalties. In some cases, the credit union might suspend your account or membership.

You can find many credit unions with low balance requirements and some without. It is also possible to find some organizations that do not require account minimums.

6. Customer Service and Reputation

One of the most important things to consider before applying to a credit union is its reputation. Many credit unions have positive reviews. Still, several have a litany of unhappy or unsatisfied customers.

Choosing a financial institution requires patience and assessment. You want to ensure the credit union you choose meets all of your minimum requirements.