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Credit unions: Everything you need to know

Like banks, insurance companies, brokerage firms, and mortgage companies, credit unions are another financial institution. Here’s everything you should know about credit unions and what services they offer.

Video Transcript

- Credit unions are sometimes referred to as the other financial institution, because they're not a bank, insurance company, brokerage firm, or mortgage company, yet they often provide many of the same services. At present, 5,500 credit unions serve over 112 million Americans.

A credit union is a cooperative financial institution owned and controlled by its members. They typically serve groups who have something in common, such as where they live, work, or worship. Because a credit union is a non-profit, any net earnings it might have are used to benefit its members.

Like banks, credit unions offer savings and checking accounts, ATMs, loans, retirement accounts, and terms savings certificates. Financial education is available to all members, as credit unions assist members in becoming better educated consumers.

Credit unions may offer lower rates on credit cards and loans than other institutions. Some credit unions have established a relationship with the Small Business Administration to expedite loans to credit worthy small businesses. While insurance and investments aren't credit union products or services, nor are such products guaranteed by a credit union's deposit insurance, many credit unions have representatives of insurance and securities companies available to assist members in making purchases of insurance products and securities, like stocks, bonds, and mutual funds.

One of the main differences between banks and credit unions is membership. To join a credit union, you can live or work in a charter area or belong to one of the select employee or association groups. So ask around and check with your employer, family, friends, and neighbors. Stay financially fit, friends.