Why is a credit union a better place for your money than a normal bank? Here are my top 3 reasons why you, your aging parents, and everyone else should love credit unions.
Disclaimer: We are not financial professionals, and this article is intended only to educate and inspire, not to provide specific advice about your specific personal financial situation (so don’t call the lawyers).
Part 3 of “How to Invest – Safely and Smartly – During the Retirement Years”
I love credit unions. I feel very strongly about their superiority over normal banks. Here are my top 3 reasons why you, your aging parents, and nearly everybody should fall in love with credit unions.
1. Credit Unions Pay You!
Because credit unions are co-operative organizations, when you join one you become a member. This is why your main account at a credit union is often called a share account. You own a share of the credit union.
As part owner, any “profit” that the credit union makes is paid back to you in a variety of ways:
- Credit unions don’t have certain fees, and if they do they are radically lower than at a normal bank.
- They offer better rates on savings (share) accounts, money market accounts, and even checking accounts! Yes, a checking account that pays you each month! It’s not much, but it’s still magic. And perfect for your Emergency Fund!
- They may offer an annual dividend.
2. Credit Unions Have Awesome Loan Rates and Credit Card APRs
Credit unions usually offer much more attractive rates on credit cards and loans than banks. This is for the same reason they can have better rates on deposit accounts: they don’t need to pay profits to anyone but their members – that’s You!
Side Note: A few years back, just after finishing graduate school, it took me a while to find full-time work. But of course my car loan payment was still due. Luckily, I had gotten the loan at my credit union, so I just called them up and talked to a real person about temporarily reducing my payments. Banks just can’t match the level of personal service that most credit unions offer.
3. No Fat-Cat Bank CEO Gets Richer
Call me old-fashioned, but I prefer to fill my own pockets and not the pockets of Wall Street bankers. Really, when was the last time you heard of a credit union president getting a multi-million-dollar bonus?
Side Note: As a credit union member, you may have voting rights on decisions relating to management jobs. If you ever needed to take action to remove an unsavory character or something, you’d have far more power to do so than you would at a bank, where you are just another customer number.
I haven’t deposited one red cent nor borrowed one green dollar from a bank in nearly 10 years. I haven’t paid a monthly account fee, or had to wait on hold for 30 minutes when I called, or helped pay for a Big Bank CEO’s vacation to St. Barts.
I love credit unions! And I think you should, too!
–Good luck, we’re all gonna need it!
- Find a credit union near you: My Credit Union
- Open up your share (aka, savings), checking, and/or money market accounts at your desired credit union.
- Move your money from your old bank. Celebrate your freedom!
- If you also want a credit card, apply for one at your desired credit union (doing a balance transfer if applicable).
- Give your Emergency Fund a jolt with our 4-Week Emergency Fund Challenge.
- Join our email list because you don’t want to miss our next article, a look at a co-operative-style investment firm…
- Search for your credit union’s Shared Branches and ATMs near you.
- To learn more about the U.S. federal government’s insurance program for credit unions (just like FDIC for banks), check out the NCUA/NCUSIF.
Once again, don’t forget to join our email list!