What Are the Benefits of Joining a Credit Union?
Many consumers are not aware of the benefits of joining a credit union. One of the main benefits is that most Canadian credit unions are member-owned and therefore offer perks to all members, whereas traditional banking institutions only offer perks to those members who have been with them for substantial periods of time.
Main Benefits
Credit unions offer many of the same services that commercial banks offer, including checking and savings accounts, investment help, buying stocks and bonds, credit card services, loans and financial advice for personal and small business banking.
Many credit unions offer free travelers checks and free checking accounts to members for a limited time as a trial period. Some offer favorable percentage rates on term deposits and Registered Retirement Savings Plan bonuses.
Credit unions often have lower overhead than normal banks, which allows them to offer loans at lower interest rates than traditional banking institutions. Refinancing with a credit union could save thousands of dollars due to lower interest rates.
Traditional banks are corporate or business-owned, whereas credit unions are member-owned and generally member-operated. To join some credit unions you must be employed by a certain group (i.e. the government, a specific company, etc.), while other credit unions are open to anyone who wishes to join.
With traditional banks, you can purchase shares of the bank through the stock exchange. However, with credit unions, each member automatically has stock in the union and therefore is considered a partial owner. In some instances, members receive dividends. Each member of a credit union is given status updates and can request further information on the union through the mail.
Smaller Perks
There are smaller, but no less attractive perks, offered by different credit unions. Some offer members the opportunity to get discounts at partner companies with which they are affiliated.
Other credit unions offer members unique financial opportunities, such as the conditional option to transfer their mortgage. By exercising this option, members can postpone their regular payments for up to three months if a labor dispute occurs or even get reimbursed for costs of the other financial lender’s transfer fee.
Many people believe credit unions to be at a disadvantage due to their typically smaller size, but, depending on what a person is looking for, the smaller size can make credit unions more personal, with a range of benefits that traditional banks are unable to offer because of their corporate status.
