What is a Credit Union?

When it comes to managing your finances, you basically have three choices: stuff it under your mattress, open an account at a bank, or join 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 a 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, profits are returned to our members in the form of higher rates on savings, lower rates on loans, and reduced fees. We exist to serve our members, not increase our profit.

Credit unions can range from small, volunteer-run organizations to large ones with thousands of members all over the world. When you join a credit union, you become a part-owner, and you have a say in how the credit union is run. Members elect a board of directors to oversee its operations. All members have an equal vote, no matter how many accounts they have or how much is in them.

Credit unions offer the same core products banks offer like checking and savings accounts, debit cards, online and mobile banking, and share certificates (referred to as a Certificate of Deposit or CD by banks) as well as loans and mortgages.

How are credit unions different from banks?

Banks are owned by shareholders, which means they have a responsibility to make a profit for their investors and shareholders. Credit unions generally have lower fees on loans compared to banks, often have no or a low minimum deposit to open an account, and are able to offer higher interest rates on certain kinds of savings and deposit accounts.

Because credit unions are usually smaller, they offer a higher level of customer service and a more personal relationship with its members when compared to banks. If you need assistance or have questions about your account, most of the time you'll be able to connect to a real person that works at one of the credit union locations, rather than having to navigate through complicated phone systems or online customer service portals. The personalized service at AllSouth can be especially helpful when members are applying for loans or credit cards, as our team members can take the time to understand our members' unique financial situations and offer solutions that work for them.

Credit unions are also often deeply involved in the communities they serve. Because they are non-profit organizations, credit unions like AllSouth can focus on serving the needs of their members and the community, rather than on generating profits for shareholders. Credit unions may offer financial education programs, sponsor community events, and provide support to local organizations and charities. Joining a credit union can be a great way to support your local community while also taking advantage of the financial services they offer.

Is your money safe?

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 more secure with a credit union than they are with a bank, with over 90% of credit union deposits being insured by the federal government, compared to only 50% of banks deposits. Money kept in banks is insured by the Federal Deposit Insurance Corporation (FDIC). Federally insured credit unions like AllSouth are covered by the National Credit Union Share Insurance Fund (NCUSIF), administered by the National Credit Union Administration (NCUA), protecting assets of each account holder individually up to $250,000. 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?

You can join a credit union by meeting its membership criteria, which are often based on factors like where you live or work. At AllSouth, everyone is welcome to join. You can join based on where you live, work, or your family relationships with other members. AllSouth also has partnerships with the Financial Fitness Association, the Carolinas Credit Union Foundation, and the American Consumer Council to make it easy for everyone to join.*

Credit unions are non-profit organizations that are owned and operated by their members, and they offer lower fees, better interest rates, personalized service, and a community-focused approach. If you're looking for a financial institution that prioritizes its members' needs over generating profits for shareholders, a credit union may be the right choice for you.

Ready to join? You can open an account online today. 

* All credit unions are required by law to have a defined field of membership. There are several ways to qualify for membership, including where you live, whether you are an immediate family member of an existing member, or your current employment with one of our Select Employer Group partners. If you do not meet any of the previous criteria, you can still qualify for membership through our partnerships with the Financial Fitness Association, the Carolina’s Credit Union Foundation, and the American Consumer Council. AllSouth will complete the enrollment process on your behalf for the Financial Fitness Association, the Carolina’s Credit Union Foundation, or the American Consumer Council automatically when your account is opened and cover the cost of your first year of membership with one of these organizations. After your first year of membership, membership renewal is optional. If you decide to renew your membership after the first year, you will be responsible for any membership fees associated with the renewal. Renewal after your first year of membership with one of our partner organizations is not required to maintain your membership with AllSouth. Please note that this enrollment will involve sharing your contact information with our partner organizations.