How would you like to be part owner of a financial institution that you would like to do business with without loss of investment? If your answer is yes, my answer is – join a credit union. Credit unions are financial cooperatives organized to serve groups with a common bond. These common bonds include employees of the same employer such as Boeing Employee Credit Union, residents or workers in a geographic area (such as Credit Union of Leavenworth County), members of the same church organizations (such as Catholic Family Credit Union), and members of same trade organizations (such as REALTORS® Federal Credit Union).
Credit unions are owned and controlled by their members. Each credit union has its own membership eligibility requirements based on its common bond. Individuals and businesses meeting eligibility requirements of a credit union usually establish membership of the credit union by opening a savings account and/or checking account.
Credit unions have been historically organized by groups with a common bond to provide its members with financial products at rates typically lower than traditional banks. Credit unions offer many of the same financial products that banks offer – savings accounts, checking accounts, debit and credit cards, certificates of deposits, mortgage loans, vehicle loans, various business products, access to an investment advisor, and more. As a cooperative, credit unions do not pay corporate income taxes, allowing them to offer such products at very competitive rates and lower fees.
Since credit unions are owned by its members, the interest paid on checking accounts, savings accounts, and certificates of deposits are called dividends. Nevertheless, credit union dividends are reported to the IRS as interest income.
In recent years, many credit unions have merged with other credit unions, increasing membership and deposits. With the economies of scale, , the credit union mergers allow them to offer more services at reduced costs.
Each credit union holds an annual meeting with its members. At the meeting, members hear from board members who provide information regarding the operation and performance of the credit union. Members also vote on board of director positions, bylaw changes, and other credit union issues. If you are a member of a credit union or planning to join one, consider attending their next annual meeting. You can find out when their next annual meeting is simply by contacting them by telephone or in person at a branch.
