What exactly is a credit union? What are the benefits of a credit union? Learn the answers to these questions plus others in this quick look at the basics of credit unions.
First of all, what is a credit union? It is a not for profit financial institution that is owned and governed by its members, through a board of directors.
The primary difference between a credit union and a conventional bank is ownership and control. Specifically, the fact that credit unions are owned and controlled by their members, whereas conventional banks are usually owned by stockholders.
Since credit unions are run not for profit and owned by their members, they have historically offered better interest rates to their members all profit can be re-invested to the members, rather than raising stock prices, as a conventional bank would do. So, often times you can get better interest rates on savings accounts and lower interest rates on loans through a credit union, when compared to a conventional bank.
Not everyone qualifies to join every credit union, though. Regulations require that a credit union restrict its members to a specific demographic group. For example, a credit...