Tired of your bank account and looking to join a credit union? You’re in the right place.
Joining a credit union can offer numerous benefits, such as better interest rates, lower fees, and a sense of community. But how exactly can you become a member? Let’s explore the simple steps you need to take in order to join.
How to Join a Credit Union in 5 Simple Steps
By following the steps below, you’ll be on your way to joining a credit union and enjoying the perks that come with it.
1. Research Credit Unions in Your Area
The first step in finding a credit union is to research the options available in your area. Consider what you want from a credit union, such as convenient branch locations or online services with competitive rates.
- Identify your preferences: Determine what services and features are important to you, such as online banking, mobile apps, or shared branch networks.
- Compare credit union offerings: Utilize resources like our Best Credit Unions list to compare different credit unions based on their offerings and member benefits. For example, if you frequently travel, consider joining a credit union participating in the CO-OP shared branch network for nationwide access to branches.
- Read customer reviews: Check online reviews or ask for recommendations from friends or family who are already credit union members. Their experiences can help you make an informed decision.
2. Check the Field of Membership
Each credit union has specific membership requirements determining who is eligible to join. These requirements are known as the field of membership.
Here’s how you can find information about the membership requirements:
- Visit their website: Go to the credit union’s official website and look for a section dedicated to membership or eligibility. This section will provide detailed information about who can become a member.
- Review the criteria: Pay close attention to the criteria listed for membership eligibility. It may include factors such as occupation, association with specific organizations, educational background, or familial relationships with current members.
- Confirm your eligibility: Check if you meet the credit union’s membership requirements. If you’re unsure or have any questions, reach out to their customer service for clarification.
- Pay applicable membership fees: Some credit unions require membership fees instead of management fees. Find out how much you’ll be required to pay for credit union membership and confirm it fits your budget.
- Provide necessary documents and complete sign-up: You’ll need to complete the necessary sign-up paperwork to open your accounts.
By researching credit unions in your area and understanding their field of membership requirements, you can narrow down your options and find the credit union that suits your needs and eligibility.
3. Choose a Credit Union
When it comes to joining a credit union, there are a few key factors to consider. This section will explore different types of credit unions and the eligibility criteria they have in place. By understanding these options, you can decide which credit union is the right fit for you.
Employer-Sponsored Credit Unions
One common way to join a credit union is through your employer. Many companies offer their own credit unions as a benefit to their employees. These credit unions are specifically tailored to the needs of the workforce and often provide exclusive perks and services. If your employer sponsors a credit union, it can be a convenient and accessible option for you to consider.
Family-Related Credit Unions
Another avenue to explore is joining a credit union through your family connections. Most credit unions allow family members of existing members to join.
If a family member is already a credit union member, you are likely eligible to join as well. This can be a great way to tap into the benefits of a credit union while maintaining a strong familial bond.
Geographic-Based Credit Unions
Many credit unions serve a specific geographic area. If you live, work, worship, or attend school in a particular location, you may be eligible to join a credit union that serves that area.
These credit unions often prioritize community engagement and can provide a sense of belonging to the local community. If you value local connections and community involvement, a geographic-based credit union might be your right choice.
Membership Groups and Associations
Certain membership groups and associations have partnerships with credit unions that allow their members to join. Such groups include places of worship, schools, military, labor unions, and homeowners’ associations.
If you belong to any of these organizations, it is worth exploring whether they have affiliations with credit unions. By leveraging your existing memberships, you can access a credit union that aligns with your interests and values.
4. Note the Cost of Joining
Joining a credit union involves a minimal cost, ensuring accessibility for individuals from various financial backgrounds. The primary expense is the purchase of share accounts, which usually ranges from $5 to $25. This share signifies ownership in the credit union and establishes your membership account.
Compared to traditional banks that may require higher initial deposits or impose monthly fees, credit unions offer a more affordable option for individuals who want to access financial services and be part of a member-owned institution.
5. Become a Member
To open a membership account at a credit union, follow these simple steps:
- Gather Required Documentation: Make sure you have the necessary documents ready, such as identification (e.g., driver’s license, passport), proof of address, and proof of eligibility (e.g., employment verification, family relationship).
- Visit the Credit Union: Visit the credit union’s physical location or website to initiate the membership account opening process. If visiting in person, bring the required documentation. If applying online, follow the instructions provided.
- Complete the Application: Fill out the membership application form, providing accurate and up-to-date information. This information typically includes personal details, employment information (if applicable), and eligibility verification.
- Fund Your Account: Once your application is approved, you may be required to deposit the initial share amount to fund your membership account. This can typically be done through cash, check, or electronic transfer.
By following these steps, you can successfully join a credit union and begin enjoying the benefits of being a member-owner.
How to Choose the Right Credit Union
When meeting with credit union representatives, asking the right questions can ensure you’re well-informed in your decision-making process.
Here are some questions to ask potential credit unions.
What do I need to sign up?
Before enrolling in a credit union account, you’ll need to know what documentation you’ll need to satisfy the eligibility requirements. You’ll likely need to present a government-issued ID and your social security number at a minimum.
What services do they offer?
When selecting a credit union, you’ll want to confirm they offer the services you need. Start by listing the specific services you’re interested in and consider future needs.
While typical checking and savings accounts are common, check if they offer investment options, car, home, personal loans, and other services that align with your financial goals. Having a credit union that can accommodate your evolving needs as life changes can mitigate headaches down the line.
Do they have good online banking options?
Online banking has become a convenient way to manage personal finances in today’s digital age. So, when choosing a credit union, it’s essential to ensure that they provide excellent online banking options.
Online banking allows you to check your balance, make mobile deposits, transfer money, and pay bills without visiting the branch. Having 24-hour access to your accounts through an online platform or mobile app can save you time and give you more tools to manage your finances effectively.
What perks do they offer?
It’s also worth considering the additional perks credit unions offer. Some credit unions provide attractive incentives, such as overdraft protection or member discounts, which can be an added advantage.
By asking these essential questions and considering the services, online banking options, and perks offered, you can confidently choose the right credit union that meets your financial needs. We recommend you choose a credit union that offers free checking accounts to avoid unnecessary fees.
Remember, making an informed decision will ensure you receive the best possible benefits and convenience from your credit union.
Pros & Cons of Being a Credit Union Member
In this section, we will explore the pros and cons of joining a credit union.
- Lower loan rates: One of the significant advantages of credit unions is their ability to provide lower interest rates on mortgages and higher interest on savings accounts. Credit unions operate as not-for-profit institutions, and any profits are returned to their members. Unlike banks, which prioritize shareholder profits, credit unions prioritize the financial well-being of their members.
- Product variety: Many credit unions boast comprehensive product lineups like traditional banks. Credit unions offer various financial products to meet their members ‘ needs, from checking and savings accounts to auto loans, mortgages, student loans, and debit/credit cards.
- Personalized service: Credit unions are typically local or regional entities, unlike larger, more impersonal banks. As such, they can provide their members with more personalized and attentive service. With a credit union, you are more likely to be treated as an individual rather than just an account number.
- Financial literacy: Financial literacy is often a priority for credit unions. They typically offer a range of educational resources, such as seminars, articles, calculators, and other tools, to help their members improve their money management skills. This commitment to member education sets credit unions apart and empowers individuals to make informed financial decisions.
- Member-owned: Credit unions operate on a unique member-owner model, giving you a say on some policies and decisions. As a member and stakeholder, your voice counts, and you can share it with the operating board of directors, ensuring that the credit union’s actions align with the needs and preferences of its members.
- Insurance: As long as a credit union is a National Credit Union Administration (NCUA) member, your deposits are insured up to $250,000 per depositor through the National Credit Union Share Insurance Fund (NCUSIF), which is the same as the FDIC protections for typical bank accounts.
- Membership requirement: Unlike traditional banks, credit unions require individuals to become members to access their products and services. While these requirements are usually flexible and easy to meet, such as opening a savings account or a charitable donation, this additional step may be a barrier for some.
- Accessibility: Credit unions generally have a smaller branch network than traditional banks. Finding a nearby credit union branch might be more challenging, depending on where you live or work. However, some credit unions participate in shared branch networks and partner with large ATM networks, which can help mitigate this limitation.
- Limited services: While larger credit unions have a wide array of products and services, smaller ones may have a more limited offering. They might lack the resources to provide the latest technological advancements, such as mobile banking and compatibility with digital payment platforms like Zelle. It’s essential to consider your specific banking needs when evaluating credit unions of different sizes.
Privately Insured vs. Federally Insured Credit Union
A key distinction between privately insured and federally insured credit unions lies in the entity responsible for guaranteeing the safety of deposits.
As the name suggests, privately insured credit unions are insured by private insurers, whereas the federal government backs federal credit unions. In the case of privately insured credit unions, deposit insurance may be provided by a private insurer approved by the state regulatory authority.
Conversely, federally insured credit unions are backed by the National Credit Union Administration (NCUA), an independent federal agency. This federal insurance ensures that members’ deposits are protected up to $250,000 per account, providing a sense of security and confidence for individuals who bank with federally insured credit unions and banking institutions.
How Credit Union Interest Rates Compare to Banks
Credit union interest rates may differ from those offered by banks. Understanding the variables between these two financial institutions when considering borrowing or saving money is crucial. Credit unions are nonprofit organizations owned by their members, while banks are for-profit entities.
Due to their non-profit status, credit unions typically offer lower interest rates on loans, better savings rates, and lower fees than banks. Credit unions aim to benefit their members rather than maximize profits.
On the other hand, banks focus on generating profits for their shareholders, which may result in higher interest rates on loans, lower rates on savings accounts, and higher fees. Therefore, individuals seeking lower interest rates on loans or higher rates on savings accounts may find credit unions to be a more favorable option compared to banks.
Joining a credit union is a straightforward process. Once you find a credit union that interests you, it is important to review their field of membership to ensure that you meet the eligibility criteria.
This information is often available on the credit union’s website. A reputable credit union will outline who can join, such as employees of a specific company, family members, residents of a certain geographic location, or members of a particular group.
Some credit unions may also charge a small fee for processing the account opening.
By becoming a credit union member, you can enjoy a wide range of benefits like being part of a cooperative community outside the for-profit banking industry. Take the first step towards joining a credit union today and experience the difference it can make in your financial life.