A credit union is a member-owned financial cooperative, democratically controlled by its members, and operated for the purpose of promoting thrift, providing credit at competitive rates, and providing other financial services to its members.
If you are looking for different options in your financial circumstances, then you might consider the benefits of opening an account with a credit union. These are not banks or building societies, they are independent bodies that rely on the people and the communities that save with them. They are non-profit entities that are there to help you with your money.
It will depend where you live and what your job is as to whether you are able to join a credit union. There are many around the country, they are there for the community, and this often means that you must live in a certain geographical area to join a credit union. However if you don’t live in an area that offers a credit union, you might work in an industry that has the credit union facilities.
They offer many different products and it will depend on the individual credit unions as to the options which are available. The basic account which will be available is a savings account; these work differently to traditional bank accounts. Interest is not paid but you receive a dividend payment yearly, depending how the credit union has fared during the course of the year.
Some credit unions even offer the option for more facilities than others, with products including mortgages. But this will depend on the credit union as to the products they offer and the rate of interest they will charge for loans.
Credit unions for the community
Sometimes opening a bank or building society accounts are difficult, you need to prove who you are with identification from a predetermined list. Often people just don’t have all this information and this can mean that a traditional bank won’t open an account. This is different in a credit union, they can often allow people to open accounts with limited identification.
This means that people can have the facilities of the credit union to save money but they might also be eligible for loans; these are often cheaper than a payday lender alternative, making credit available to help towards the cost of living in a difficult economy.
A credit union is about the part of a community, those people who put into the credit union within the community are the ones that benefit at the end of the year. It is about bringing understanding about money and saving, which allows for those that need a loan, an option.
Therefore, if you are looking for a new way to manage your finances then there is more to a credit union than you might have ever realised. Some credit unions have education and training; this is a great way to teach financial money management. Education is a great way for people to learn money management skills, sometimes financial terminology is difficult to understand and if you have the skills, you are less likely to make decisions that are negative for your financial situation.
Check out the credit unions that are close to you, and what they might be able to offer.