In 1909, the first credit union was established in the United States. Currently, there are over 4,500 credit unions in America with membership surpassing 139 million. Credit unions have played an important role in our culture, but what makes a credit union special? And what makes a credit union different than a bank? Here we’ll discuss the benefits of being a credit union member vs being a bank customer.

What is a credit union?

Credit unions were created to provide low-cost financial services to people who lacked access to them. The intention was to give people the opportunity to improve their way of living. The main difference between a credit union and a bank is their profit and owner status. Credit unions are not-for-profit cooperatives owned and operated by their members, while banks are for-profit institutions owned by stockholders. The not-for-profit and for-profit difference is what sets the products and services apart between credit unions and banks.

Because a credit union is owned by its members, typically membership is open to individuals who share a common bond, such as the industry they’re employed in, the community they live in or their membership in a certain community organization.

Banks are focused on making a profit, rather than specifically centering on the needs of their account holders. This is one of the reasons you’ll often find banks charge more fees, and at a higher rate, than credit unions do. Interest rates on lending also tend to be higher at banks, while their interest rates on savings products tend to be lower. What makes a credit union different is a mission to provide its members with the best terms it can afford on financial products and services.

Accessibility

Another benefit of being a credit union member is that, as a cooperative, all credit unions work together. This CO-OP consists of over 30,000 ATMs and 5,000+ shared branches, meaning members have more direct, surcharge free* access to their money than most traditional bank customers do.

Fewer fees

Credit unions tend to have lower costs and more flexibility than banks. For example, credit unions are more likely than banks to offer checking accounts with lower monthly maintenance fees or minimum balance requirements.

Better rates

Credit unions offer higher interest rates on savings accounts and lower rates on loans. Higher interest rates on savings accounts help your money grow faster, while lower rates on loans make it cheaper to borrow money. Credit unions are also known for being innovative and finding ways to offer better promotional offers on financial products.

Outstanding customer service

Since credit unions are smaller and committed to serving their members, not investors, they tend to provide better customer service. Credit union representatives will likely give you personalized attention and help you identify the best services for your needs—something often lacking at big banks.

Community-Centered approach

Credit unions are known for their community-centered approach. As a member-owned cooperative, credit unions prioritize the needs of their local community. This can create a more personalized and supportive environment for members. Additionally, credit unions often engage in community initiatives and support local causes, fostering a sense of belonging and community responsibility.

Partner Colorado Foundation has proudly supported Colorado students by awarding scholarships each year, as well as volunteering to help out local non-profit organizations in the community.

Financial education focus

Many credit unions also prioritize financial education and offer educational programs, webinars and seminars or online resources designed to help people move ahead financially. Partner Colorado regularly hosts a variety of webinars and seminars with various partners to provide you information about timely financial topics and good financial advice. We also offer free financial calculators so you can run the numbers before making important financial decisions like buying a new car or home.

Our members can also take advantage of our Partners in Financial Wellness program for those who need help with different aspects of their finances like debt counseling and debt management.

Your money is safe

In 1970, Congress created the National Credit Union Administration (NCUA) to insure deposits in credit union accounts. This is similar to the Federal Deposit Insurance Corporation (FDIC) banks use.

Like FDIC Insurance, NCUA Insurance guarantees up to $250,000 per share owner, per insured credit union, for each account ownership category. All federal credit unions and most state credit unions are insured by the NCUA. At the NCUA website, you can see if your credit union is covered, and NCUA-Insured credit unions always prominently display their insurance status on signage in their branches.

There are many benefits to being a credit union member. Credit unions strive to provide a supportive environment for its members by offering lower fees and better rates with an emphasis on being community centered and member focused.

*Surcharge-free transactions are available for debit and ATM card holders of participating credit unions.