What Is A Federal Credit Union?

The Great Thing About Credit Unions

There are a lot of reasons why some people prefer to do business at credit unions. Some recognize that the customer is much better, the agents have a tendency to spend more time with the customer. While others have enjoyed lower interests.

Some of the Benefits of Credit Unions

Since federal credit unions are non-profit organizations, they do not have to pay federal or state taxes. Because they do not have to pay taxes they are able to charge lower interest rates. Lower interest rates are a good thing for customers who are in need of borrowing money.

When a customer goes to take out a loan, the one thing that they ask about is the interest rates. Interest rates can amount to a good amount. So for customers to seek out institutions with lower rates, it’s considered money wise.

Many corporations work with non-profit banks. When working for the corporate, it will be explained to the worker that they will be eligible to deal with this credit union and receive optimum advantages. In fact one of the questions potential employees ask companies besides inquiries about wages, are inquiries about credit union affiliation.

In many cases, if an individual can not get open a bank account at a regular bank, they will be able to get one at a credit union upon their employment. This can be a win-win situation for the employee.

Becoming a Member of a Credit Union

In order to join a credit union, you must become a member. It is the members that own the credit unions. They are considered to be a community-oriented organization. Banks are owned by investors. Federal credit unions are not owned by the federal government.

What do you have to do to become a member of a federal credit union Houston? That’s an easy question. You simply have to have something in common with the members that are there. For example, you have a federal employee credit union. There is also the State Employee credit union. However, there are credit unions that you can join with less stringent rules. They can be joined by going online. Once you are accepted you can put down a deposit between $5 to $25.

Who Regulates Credit Unions?

Some may ask prior to becoming a member of a credit union, “Will my money be safe?” This is an excellent question, that any reasonable person will ask. Credit unions are not regulated by FDIC. The Federal Deposit Insurance Corporation regulates banks.

Credit unions are regulated by the National Credit Union Administration. Congress created this administration in order to supervise the credit unions. With National Credit Union Share Insurance Fund member accounts are covered up to $250,000. Congress created this fund in 1970 to make sure the members who had their money with credit unions were covered.

Credit unions have the same features as banks. They have checking accounts, savings accounts, the ability to make loans and more. Some of the limitations of credit unions are that they may not be as many locations as banks. Also, the number of ATMs are more than likely less.

When it comes to credit unions the individual will have to weigh the odds. The fact that the fees are typically less than a bank can be enough for a person to become a member, for another, it may be that their employer deals with the organization and that it’s considered to be part of the community.