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What is a Credit Union?

A federal credit union is a cooperative, not-for-profit financial institution organized to promote thrift and provide credit to its members (who are also its customers). Federal credit union members are provided with a safe, convenient place to save and borrow at reasonable rates, with savings insured up to $250,000 by the National Credit Union Share Insurance Fund (NCUSIF). Certain retirement accounts are insured to $250,000. Learn more about what it means to be a NCUA insured credit union.

Key Benefits of Credit Unions

Check out some videos about the benefits of credit unions!

Join a Credit Union Video

 

Rely on Credit Unions Video

 

Come See Your Local Credit Union Video

 

The key difference between a bank and a credit union

is that banks are owned by shareholders, not customers, and are for-profit – which leads to higher fees and rates on loans, since excess profits are returned to shareholders in the form of dividends. Contrast this with a credit union, which returns any excess to members in the form of dividends as an added bonus.

A federal credit union is member-owned and controlled through the election of a board of directors drawn from membership. Board members serve on a volunteer basis; one board member may be compensated.

Federal credit unions have been serving the nation's consumers for 74 years. As of Dec. 31, 2007, there were approximately 8,000 federal credit unions with about $800 billion in assets and serving nearly 90 million people.

Membership in federal credit unions is not open to the general public. Instead, it is limited to persons sharing a common bond of occupation, community or association. Examples are employees of corporations, members of associations (such as Knights of Columbus) and residents of a defined area (such as a town or a neighborhood).

To join a credit union, a potential member must be first eligible under the common bond provisions, and submit a membership application. Upon submittal of the application, and the purchase of at least one share (typically $5), a person becomes a member with full voting rights.

Many credits unions have a "once a member, always a member" policy, and most also permit members of the immediate family or household of a member to join.

Click on the links below to see fun videos explaining the difference between banks and credit unions -

The Difference Between Banks and Credit Unions - Part 1

The Difference Between Banks and Credit Unions - Part 2

The Difference Between Banks and Credit Unions - Part 3

 
   
     
 
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