A credit union is a member-owned financial cooperative that provides traditional banking services. They are typically non-profit organizations, meaning any surplus earnings are returned to the members in the form of reduced fees, higher savings rates, and lower loan rates.
Here’s a real basic breakdown of what credit unions are and how to join one:
What is a Credit Union?
- Member-Owned: Unlike banks, which are owned by shareholders, credit unions are owned by their members. Each member has an equal say in how the credit union is run, typically through voting at annual meetings.
- Non-Profit Status: Credit unions operate as non-profit entities, meaning their primary goal is to serve their members rather than to maximize profits.
- Services Offered: They offer a range of financial services similar to those provided by banks, including savings and checking accounts, loans, mortgages, and credit cards.
- Community Focused: Many credit unions serve specific communities or groups of people, such as employees of a certain company, residents of a particular area, or members of a specific organization. At MMCCU, we serve anyone that is employed by a healthcare employer.
Benefits of Credit Unions
- Lower Fees: Credit unions often have lower fees compared to traditional banks.
- Better Rates: They typically offer higher interest rates on savings accounts and lower rates on loans.
- Personalized Service: Credit unions often provide more personalized customer service due to their smaller size and community focus.
- Community Impact: Since they are focused on serving their members rather than generating profits, credit unions often invest in their local communities.
How to Join a Credit Union
- Eligibility: Determine if you are eligible to join a particular credit union. Eligibility criteria vary but often include:
- Geographic location (e.g., living or working in a certain area).
- Employment (e.g., working for a specific employer).
- Membership in a certain organization or association.
- Family connections (e.g., a relative who is already a member).
- Application: Once you find a credit union you are eligible for, you will need to complete an application. This can usually be done online or at a branch.
- Initial Deposit: Most credit unions require an initial deposit to open a savings account (often called a “share account” because it represents your share in the credit union). The amount is usually modest, ranging from $5 to $25.
- Documentation: You will need to provide identification (e.g., driver’s license, Social Security number) and possibly proof of eligibility (e.g., employment verification, proof of residence).
- Membership Fee: Some credit unions may charge a small one-time membership fee. (MMCCU does not.)
Steps to Join a Credit Union
- Research Credit Unions: Look for credit unions in your area or ones affiliated with your employer, community, or organization.
- Check Eligibility Requirements: Review the membership criteria to ensure you qualify.
- Visit the Credit Union: Go to the credit union’s website or visit a branch to get more information and start the application process.
- Complete the Application: Fill out the necessary forms and provide the required documentation.
- Make an Initial Deposit: Fund your account with the required minimum deposit.
- Activate Membership: Once your application is approved and your initial deposit is made, you will become a member-owner of the credit union.
By joining a credit union, you can benefit from lower costs, better rates, and a more community-focused banking experience. Learn more about MMCCU!
