Friday, January 2, 2009

Join A Credit Union


Tip #47 - Join A Credit Union. What is a credit union? A credit union is like a bank. Only they are not-for-profit and they are owned by its members. According to CUNA (Credit Union National Association) "...credit unions to pay dividends to their members (not shareholders) and offer them lower loan rates, higher savings rates and fewer service fees..." Generally, a credit union offers competitive rates for loans and savings. They offer mortgages, home equity loans, car loans, and personal loans. They have savings accounts, checking accounts, CDs, retirement accounts, and education accounts. Pretty much anything your bank can do for you, a credit union can do, too. Only oftentimes it's cheaper or better.

When you have a mortgage through a credit union, it stays with the credit union. It is not sold to other third-party buyers. Usually, their fees are less than with mortgages from other institutions. They are generally more flexible with loans. For example, they might not require you to pay private mortgage insurance (PMI) with a mortgage through a credit union. For savings, their rates are as competitive as banks. They may not require you to keep a balance in their checking account as a bank does. There are many times other free services through the credit union - notary public, coin counting, etc.

How do you join a credit union? Oftentimes, you can join through your employer - schools, the military, civic organizations, etc. If you are interested in learning more about credit unions, check out the CUNA site. And if you want to see if you can qualify to join one, check out this credit union locator. You could save money and have better service by using a credit union rather than a bank, so check it out.

In Real Life (IRL) - My husband and I and now most of my extended family belong to Navy Federal Credit Union. If I'm not mistaken, they are the largest of all of the credit unions. If a family member belongs to the military or used to belong, then you may be eligible to join.
We have received great benefits from it. We have our mortgage through Navy Federal. And even though we put down more than 20 percent for a down payment, we would not have had to pay PMI had we put down only 10 percent. Our mortgage has never been sold to a third-party in the eight years that we have held it. We got a better interest rate than any commercial bank or other institution could offer us.

We have used their notary public service numerous times -all for free. We have opened up education IRAs and retirement IRAs for our family for competitive rates. We bring our coins in to get sorted and deposited into our account through a coin counter machine for free. My extended family has been able to join through us and they have benefited from Navy Federal's favorable terms. They have competitive CD rates for my parents and for my brother who buys and sells real estate, they are flexible and competitive with loan rates. I can't say enough good things about them. They go out of their way to help us if we want to move around money or do something out of the ordinary. I would estimate that we have saved thousands of dollars using their services over a traditional bank's services. If you get a chance, look into a credit union for yourself.

2 comments:

Smalltown RN said...

I belong to a Credit Union...my mortgage is through a credit union....and yes I do feel like I have a little more control over my money.

I have never used their service of coin rolling...didn't even know they provided such a service...being in Canada it might be a bit different I will have to check it out...it's funny you should mention coins....back in November I took the bowl of coins and wrapped $260 worth of coins and took them into the bank....

As far as I know anyone here can join a Credit Union...you pay a $5 member fee which just goes into trust....

I do have RESP's for my children...but sadly the RRSP's for me are gone....but maybe soon I will be able to open one....

Mich said...

I'm not sure that every credit union offers the same services. But the services that they do offer are often free or for a nominal fee. Over time, the savings can be great. Hopefully, once you get back on your feet, you can save for retirement and education again.