Almost every person on the planet is familiar with banks. Everyone has had an experience, whether good or bad, with it, and due to this, the majority of the population always gravitates towards banks, not knowing that other options exist. Whether you want to or not, you might find yourself in the footsteps of a bank, without any clue of alternatives that could change your life.
Banks are profitable corporations that strive to provide for not only you, but itself too, by bulking up on money that you pay, in the form of interests or fees, and paying its shareholders rather than finding another use of the funds. Although this allows the fluidity of finances and gives the bank the margin to grow or increase its assets, it can also have a shortcoming in the form of less focus on the customer.
You may feel frustrated that the kind of service or packages you require is unavailable in a bank. You may also be frustrated by the high-interest rates or the hefty fees that you need to pay while using a bank service. If this is how you feel, do not worry anymore! We want to point you towards a different avenue to explore.
People are often unaware of a great alternative that works like a charm for those who want to explore their options and look for a more customer-oriented service: credit unions. They have been around for a long time; for instance, Allegacy Federal Credit Union started in 1967 and is still functioning well with a strong foundation. I have a couple of business accounts there. These organizations are not to be underestimated as they are reliable and provide a bunch of options.
Without further ado, let us have a look into the details of credit unions.
What is a credit union?
A credit union is essentially a bank but on a smaller scale. We would not glorify it too much by saying that it exists on a global level, because it does not. A credit union's sole purpose is to aid a particular community or communities. However, this has changed over the years, and the service has expanded to include a bigger network for the ease of its members.
A credit union is a nonprofit organization. This, quite simply, means that a credit union, unlike a bank, takes money from you only to invest it in the union and provide you with better options, and not to distribute the money amongst the shareholders as is done with banks. Due to this, credit unions often have options that serve the interests of the members or suits them better than the perks offered at banks.
You may have taken note of the usage of the term “members” for credit unions. This specific term is used, rather than customers or clientele, because, unlike a bank, the credit unions take on a unique approach and makes their foundation on memberships. That being said, credit unions take on members rather than clients for them to gain access to the services offered by the credit unions. Think in terms of Sam's Club or Costco.
The membership of a credit union always requires you to meet a specific set of requirements. For instance, a particular credit union may ask for validation that you belong to a specific community, work within a particular area, or study in a given region. You may also get membership upon knowing a member of that particular credit union by relation. Membership may depend on a bunch of other factors that vary vastly from the credit union to union. It all depends on the one that you seek.
As mentioned above, credit unions are relatively smaller functioning units in comparison with banks, but should not be underestimated. All credit unions offer you the same perks as those provided by a bank, in terms of credit card services, deposits, accounts, and whatnot. However, the perks are offered on a smaller scale as the business is not as progressive as that of a bank. For instance, you may not get a long list of features to choose from as those provided by banks.
However, despite not providing access to a broader range of features, credit unions make up for this by asking for minimal interest rates or fees. It is one of the reasons why credit unions are preferred by people who know of them. In addition to this, unions like Truliant Federal Credit Union have options that financially prepare long-term goals.
Despite all this, you may be worried about the authenticity of the credit unions. Do not worry, because they have got you covered in terms of security. They are registered with NCUA for insurance of the deposits made to the credit unions. This organization differs from that of banks but is still reliable. If you want, you can do further research on them, to be sure of what you want. Dealings with money can be tricky, and you need to have comprehensive research on it beforehand!
Credit unions also require fees for joining them after the initial membership process, but fear not, as this is a small amount, usually no more than $30. After this, you can deposit by paying a certain amount of money to the credit union (often a tiny one), and gain access to a brand new credit union account!
Credit unions may have a lot of upsides and downsides as per the preferences of the potential members; a key to resolve this is to read up on your preferred credit union and check if they offer what you need while reading our collection of advantages and disadvantages given below.
A credit union takes a head start in numerous factors. Firstly, credit unions are a nonprofit organization, whereas banks are meant for profit. This may not seem to be that big of a difference. Still, we must state that nonprofit organizations are almost always intended for the greater good, as the money recycles its way back into the hands of those who made the deposit, rather than the pockets of someone else, ensuring that the money is utilized to cater to your needs as a user of the services provided by the credit unions.
The most significant advantage, however, comes in the form of charging lower interest on products, compared to those of a bank, for instance, the loans you take or the credit cards that may have been issued to you by a credit union. In contrast, the high-interest rates offered by a bank are where much of the money flows into the bank's systems. This feature of the bank can break the back of an average citizen, who is already barely getting by. Credit unions are a must for people in a tight spot, but for people who can afford it, credit unions still may entice you with better options.
One of the options that may attract people of all financial or socioeconomic backgrounds is high interest on the deposits that have been made to a credit union. This allows you to increase your savings by a more considerable margin than that offered to you by any typical bank. A feature like this is primarily beneficial for people who are saving up for long term plans; not only will your money increase in value more than elsewhere, it will also be in safe hands for you to come back to later and reap the rewards.
The credit unions may be nonprofit organizations, but it still takes a particular level of commitment from their side that makes them wholly appealing to the general public. A credit union is bound to give you a better service than a bank and is more likely to address your individual needs. On top of this, unions can provide you with all the information you need by only going through their website, for instance, Allegacy Federal Credit Union provides you with rates and other factors, as well as the option of getting in touch with them, which they comply with very well, responding almost immediately and effectively to queries.
To summarize the advantages,
- Nonprofit likely to cater to an individual in a better way
- Low interest on loans et cetera
- High profits made on deposits.
Although the credit unions come with many ups, there are definite pitfalls associated with them. The foremost factor is their lack of geographical outreach. With an excellent service like Truliant Federal Credit Union, you may be able to gain access to the services provided by credit unions over a wider area, but this is still limited compared to the global outreach of banks.
The products offered by credit unions also lack in options as compared to those provided by banks. This has to do with its more extensive network and connections.
Another factor that may come as a downside with credit unions is that you have to meet a particular set of criteria for you to qualify for membership. This limits the access of a particular person to a credit union considerably. However, some unions are now providing the service of joining without any set requirements by merely joining an organization or a charity that they recommend. This is still a bit of a hassle as compared to banks that take on all customers.
To conclude, the disadvantages are:
- Lack of networking
- Lesser products are offered
- Attaining memberships can be a hassle
State Employees Credit Union
Like the aforementioned Allegacy Federal Credit Union and Truliant Federal Credit Union, the State Employees Credit Union is one of the leading unions in North Carolina. It functions to serve the members of the state and a bunch of associated communities, to provide you with the best possible experience.
As a resident of North Carolina, it may not be hard for you to gain membership with this credit union and access the full range of benefits offered by it, whether in high profit or low interest. This union is an excellent embodiment of our advantages, and we urge you to consider it! I have had an account there since I was 16 and I love it!
Handling money is almost as risky as depositing it, so you need to take care of both factors while you are at it! Make sure you find the right place for your money and deposit away. Credit unions are the answer for you if you wish to delve into a broader range of options beyond banks. Good luck!