Recs

5

Credit Union Pros and Cons

Have you considered maintaining an account at a credit union in addition to or instead of at your local bank? You should. Credit unions have advantages and disadvantages. Let's review some of them:

Advantages:

  • They're owned by their members and are nonprofit.

  • They offer competitive interest rates, usually beating the best rates from local banks.

  • Their service is often better, too. If you turn to a traditional bank for guidance, you might not be told everything you should know, as that's not always in the bank's best interest. But, credit unions have no reason not to help you as much as they can.

  • Credit unions offer more and more services these days. Many offer credit cards, debit cards, mortgages, new and used car loans, checking, and more.

  • At many credit unions, you need just $1 to open an account, qualifying you to take advantage of their many services.

Disadvantages:

  • Credit unions typically have few branch offices and few, if any, ATMs. To circumvent the ATM problem, many credit unions have formed networks of surcharge-free ATMs that members can use. This isn't much of a disadvantage anymore, since credit union ATM networks have grown more extensive.

  • Some credit unions don't return cancelled checks to you. But then, these days, many traditional banks have stopped doing this, too.

  • Your local credit union may not offer you as many services as you can get from the neighborhood bank. Check to see what's offered. You may end up deciding to keep accounts at each, for different purposes. (On average, though, credit unions have been adding services over the years.)

Learn more about credit unions at the website of the Credit Union National Association. You can search for credit unions in your neighborhood at www.joinacu.org. Not everyone is eligible to join one, but tens of millions of Americans are -- so don't assume you're out of luck. You may be able to join one through your employer, community, religious group, or some other association. If your employer isn't affiliated with a credit union, consider asking your benefits office to look into developing an affiliation.

Learn more in our All About Banking area. Our Savings Center is helpful if you're thinking about how to best deploy your short-term moolah (it offers Fools some special deals on interest rates). And you can learn all about brokerages and find one that's right for you in our Broker Center.


Read/Post Comments (0) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

DocumentId: 492674, ~/Articles/ArticleHandler.aspx, 7/22/2014 6:25:10 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Selena Maranjian
TMFSelena

Selena Maranjian has been writing for the Fool since 1996 and covers basic investing and personal finance topics. She also prepares the Fool's syndicated newspaper column and has written or co-written a number of Fool books. For more financial and non-financial fare (as well as silly things), follow her on Twitter...

Today's Market

updated Moments ago Sponsored by:
DOW 17,113.54 61.81 0.36%
S&P 500 1,983.53 9.90 0.50%
NASD 4,456.02 31.31 0.71%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes


Advertisement