Credit unions are less well known than other financial institutions, like banks. With lower recognition comes higher misunderstandings, which is why myths about credit unions are commonly held. We’re here to set the record straight about credit unions so more people can take advantage of their great services.
If you’ve considered taking out a loan from a credit union, you might have been told you have to become a member to use the financial services. Some people believe joining a credit union is difficult, and give up on becoming credit union members.
You can apply online to join T&I Credit Union in about 10 minutes. The field of membership includes anyone who lives, works, or worships in Lapeer, Livingston, Macomb, Oakland, St. Clair, Washtenaw, or Wayne counties, MI. It’s not a requirement to be employed by a specific company or a certain line of work to become a member.
Where services are available
Because credit unions operate based on local fields of membership, many people wrongly assume that credit unions only offer local services. Luckily, there are plenty of ways to access your credit union accounts outside of your locality.
Credit union members can access online and mobile banking services, so you can access your checking and savings accounts from anywhere. T&I Credit Union also operates with shared branching, meaning you can find a shared branch near you when you’re away from home.
What services are offered
Banks and credit unions offer largely the same products and services. Both types of financial institutions offer credit cards, loans, savings accounts, and retirement accounts.
Credit unions also offer federally insured accounts up to $250,000, just like banks. The only difference is that bank accounts are insured by the Federal Deposit Insurance Corporation (FDIC), while federal credit union accounts are insured by the National Credit Union Administration (NCUA).
Regulation for financial institutions
In terms of federal rules, one big difference between credit unions and banks is that credit unions don’t pay federal taxes. They still pay state and local taxes, but the money a credit union saves by not paying federal taxes is reinvested into the institution or passed on to members as lower interest rates on loans.
What financial institutions offer the best deals
You might think that big banks can offer the best deals by leveraging their large assets to offer banking incentives and low-priced loans. However, as not-for-profit institutions, credit unions can offer members affordable loans and high-interest savings opportunities.
Credit Unions still charge interest on their loans to cover the risk of offering these financial products, but the profit they make from doing business must either be reinvested or passed on in savings to customers.
What savings accounts entail
Savings accounts are not the same regardless of which financial institution holds them. When you open a savings, or share account with a credit union, you become a shareholder. This means you’ll be able to vote for board members and have a say when suggestions and issues come up.
Does size matter?
Credit unions are smaller than big banks, but this is not necessarily a disadvantage. Your savings are insured to a quarter of a million dollars at both banks and credit unions, and most credit unions offer as many products and services as banks.
A smaller financial institution often means more personal support and customer service when you need it.
Who do financial institutions aim to support?
You might have the perception that credit unions are designed to support those in financial need, and should, therefore, be avoided by people with financial security. As not-for-profit, credit unions can offer flexible financing to people with low credit scores, but they can also offer great interest rate loan options to credit-worthy borrowers.
Banks are for-profit businesses, so they intend to make money from their financial products, like loans. They’ll pass these profits to their shareholders.
Remember how opening a savings account at a credit union makes you a shareholder? If your credit union does well, you’ll probably see it in the form of high interest rates on your savings account and affordable loan prices.
Should you join a credit union?
After learning the truth about credit unions, you might determine it’s a good fit for you.