What is a Credit Union?
Tuesday, March 17, 2020
Read Time: 3 mins
Thinking about where to put your money? You have three basic choices: under your mattress, a bank, or a credit union. We don’t recommend leaving your money under your mattress - it’s not the most secure place. That leaves you with a credit union or bank. While most of us know what a bank is, what exactly is a credit union?
What is a Credit Union?
A credit union is a not-for-profit financial cooperative that is owned by its members. Credit unions, like AllSouth, provide all the traditional banking services that a bank does, but because we are member-owned, all profits are returned to our members. We exist to serve our members, not increase our profit.
Credit unions can range from small, volunteer-run organizations to large with thousands of members all over the world run by a professional board (like AllSouth). When you join a credit union, you become a part-owner. As a member, you can vote to elect the board of directors and on decisions that will impact the credit union. All members have an equal vote, no matter how many accounts they have or how much is in them.
We offer the same core products banks offer like checking and savings accounts, debit cards, Online and Mobile Banking, CDs (Certificate of Deposit), home, auto, and personal loans, as well as mortgages.
How are credit unions different from banks?
Banks are owned by stockholders, which means they have a responsibility to make a profit for their investors. They earn money by charging their customers with higher fees. Credit unions, in general, have fewer fees than banks, with often no minimum or a very low minimum deposit to open an account. It also means that we are able to offer better interest rates on deposit accounts and loans.
Credit unions offer a higher level of customer service compared to banks. For example, if you walk into any of our locations, you’re most likely greeted by name before you get in line. Here’s another example, if you walk into a bank looking for an auto loan, you’re just a set of numbers, and if your numbers don’t meet their qualifications, that’s it. With us, we’re able to build a more personal relationship and help our members meet their financial goals. You’re more than a set of numbers in a computer.
(Now, that doesn’t mean credit unions give out loans to any member who applies, but we can take a look and work more closely with you to help make your every day possible.)
Is Your Money Safe?
YES! Since we’ve established earlier that the mattress is not a good option, which is safer for you to store your money, a bank or a credit union?
Good news! Your funds are just as secure with a credit union as they are with a bank. Money kept in banks is insured by the FDIC (Federal Deposit Insurance Corporation). Federally insured credit unions offer NCUA (National Credit Union Administration) insurance to protect its members. Both are federal insurance and backed by the U.S. government. Under current laws, they protect up to $250,000 for each depositor. State-chartered credit unions have private insurance, which may not offer the same protection as FDIC or NCUA insurance.
How can you join a credit union?
Can you join a credit union? Absolutely. There is a credit union out there for you. To join, you must qualify by being part of a specific community. For example, to join AllSouth, you have to live, work, worship, or attend school in any of the following counties Calhoun, Fairfield, Kershaw, Lexington, Newberry, Richland, Saluda, or Sumter. You can also qualify if an immediate family member is eligible to join.
If you're looking for a financial institution with great service and where you're treated as more than just a customer, consider a credit union for your banking needs.
Want to join now? You can open an account online today.