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Why Credit Unions Are Different?
Credit unions are different from other financial institutions in many important ways—from the reasons to join to the safety of your money to who actually owns the credit union! We at Greater Kentucky Credit Union think everyone deserves the chance to find a credit union, fall in love and join a credit union. But we realize that before you’re willing to commit, you need all the facts.
Members Own the Credit Union
A credit union is a democratic, member-owned cooperative. So when you join a credit union, you’re more than a member; you’re an owner—and that means you have a say in how your credit union is run.
A volunteer board of directors, elected by the members, governs a credit union. With their vote, each member has a direct impact on the direction of the credit union. As part of the democratic process, each credit union holds an annual election where members select candidates for the Board of Directors. This is very different from a bank, where stockholders vote according to the number of shares of stock they own.
Credit Unions are Not-for-Profit
Credit unions provide the same products and services as other financial institutions—but credit unions are not-for-profit and exist to help people, not to make a profit. As such, all earnings are returned to their members in the form of high-interest savings and low rate loans.
This also enables credit unions to operate at a lower cost than many for-profit institutions, and helps them to offer competitive loan and savings rates to their members.
Credit unions follow conservative investment practices and lend responsibly and live within their financial means, so you can trust your credit union's decisions.
Credit Unions Put People First
Credit unions live by the philosophy of "People Helping People.”
Credit unions across the country are committed to their communities, offering financial services to underserved populations, engaging youth in financial education, and returning profits to their members.
While they are not mandated to do good works, as banks are, by the Community Reinvestment Act, credit unions serve their communities to strengthen the connection with members and improve the quality of life for those in need of financial services. The National Credit Union Foundation coordinates the “Real Solutions” program, which supports community reinvestment programs in 33 states.
Why Join a Credit Union
Join a credit union and you'll enjoy a variety of benefits!
Credit unions provide a place for members to save and get loans at reasonable rates. Other services vary by credit union, and are tailored to meet members' needs. This is one place where member voting comes in; as a member, you get to say what's important to you. Services include:
- Credit cards with low or no annual fees and low interest rates
- Direct deposits, cable and wire deposits
- Financial education and counseling services
- High interest rates on savings accounts, CDs and money market accounts
- Investment services
- Low cost or free checking with low or no minimum balance requirements
- Low interest rates on mortgages and vehicle loans
- Notary services
- Online banking
Because of the superior personal attention they give to members—and high quality service—credit unions consistently earn higher customer satisfaction ratings when you compare them to banks. In fact, credit unions have consistently ranked highest for service in a Gallup study commissioned by American Banker magazine.
Credit unions employ knowledgeable member service representatives who will work with you to make your financial transactions as easy and convenient as possible—and help you achieve your financial goals.
Better Rates and Lower Fees
Credit unions pass any "profits" they make directly back to members. Because there are no shareholders to keep happy, credit unions are able to offer, on average, better rates and lower fees.
In fact, credit unions typically offer higher rates on savings and certificates—and much lower rates on loans. That’s because all profits come back to the members—not to a board of directors.
And your savings are insured up to $250,000 by the NCUA so your money is safe and secure.
How Credit Unions Protect Your Money
Credit unions know that you need more than a variety of products and services. You need to know that your money is safe—and at a credit union it is.
Money is Insured
The National Credit Union Administration (NCUA) is the independent federal agency that regulates charters and supervises federal credit unions. NCUA, with the backing of the full faith and credit of the U.S. government, also operates and manages the National Credit Union Share Insurance Fund (NCUSIF), insuring the deposits of nearly 90 million account holders in all federal credit unions and the majority of state-chartered credit unions. As an alternative, many credit unions choose to insure your funds through private insurance companies.
The NCUSIF provides all members of federally insured credit unions with $250,000 in coverage for their individual accounts. These accounts include regular shares, share drafts (similar to checking), money market accounts, and share certificates. Individuals with account balances totaling $250,000 or less at the same insured credit union have full NCUSIF coverage.
Members have full NCUSIF coverage at each federally insured credit union where they are qualified members. While NCUSIF coverage protects members at all federally insured credit unions from losses on a broad spectrum of savings account and share draft products, it does not cover losses on money invested in mutual funds, stocks, bonds, life insurance policies, and annuities.
Credit unions generally offer higher interest rates for savings accounts and lower rates for loans, when compared to most banks. And credit unions typically do not engage in predatory lending practices, such as offering subprime loans or payday lending programs with exorbitant rates and fees.
Credit unions also follow conservative investment practices and live within their financial means. That means you can trust your credit union to put the needs of you and its other members first.
Across the country, credit union staff members participate in programs that help consumers learn the basic financial skills that will serve as a strong foundation for their financial futures.Also, many credit unions and their state associations work with other non-profit entities to help educate consumers about the risks associated with predatory lending.Whether it’s working with schools to open in-school branches, hosting a financial planning seminar, or offering ID-theft prevention tips at a branch, credit union staff members share their knowledge with the community. Because the more knowledge credit union members have, the wiser the decisions they can make with their money.