Sometimes the best place to do your banking isn’t a bank. Not-for-profit credit unions exist for the benefit of members and generally don’t have the high fees that traditional for-profit banks are known for. Over 101 million people in the U.S. are members. Here are four reasons to join them:
1. Higher earnings. Credit unions are not-for-profit organizations, so they’re able to put their earnings back into the business in the form of higher rates on deposit accounts.
If you open a checking or savings account or a certificate of deposit (CD) at a financial institution such as Ascentra Credit Union, you’d earn better rates on average than you’d earn with a similar account at a bank.
2. Lower fees on checking products. Because credit unions don’t have to maximize profits from their member accounts, they often offer checking accounts with no minimum balance requirements or monthly fees, benefits many big banks don’t have. And credit union accounts are federally insured up to $250,000 per depositor by the National Credit Union Administration.
3. Better rates on loans. If you’re looking to finance a major expense, such as a new car, you may find that the best loan rate comes from a credit union instead of a bank. As nonprofits, credit unions don’t need to maximize loan rates, so they’re often more competitive than other types of lenders.
4. Local investment. When you choose to do business with a credit union, there’s a good chance your money will benefit local causes that you value. For example, Ascentra created The Ascentra Credit Union Foundation with a $1.75 million endowment to support efforts such as local youth development, credit education activities, and community development, among other worthy efforts.
To open a credit union account, you need to be a member. There are a number of ways to qualify, including living or working in the geographic area of the credit union, or having a relative who’s already a member. You may call or visit your local branch to learn the best way to join.
Credit unions are a great place to bank. Once you become a member, you can enjoy better rates on both deposit accounts and loans, and you’ll know that your money is in an institution that shares your values.
Margarette Burnette, NerdWallet
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