by: Jennifer Calonia
Big banks have earned negative reputations for prioritizing their bottom lines over their customer service and product offerings; and many people undervalue the importance of financial institutions in their day-to-day activities. However, the Federal Deposit Insurance Corporation (FDIC) reports that two-thirds of households have both a checking and savings account that they rely on regularly, and it’s clear these financial products are non-negotiable facets of daily life. But big banks aren’t the only answer— an alternative to inflated fees and poor customer service can be found with alocal credit union. Many consumers feel like finding thebest credit unions anyone can joinis near impossible to accomplish, due to membership criteria. However, some of thebest credit unionsare more welcoming to the general public than popular opinion suggests.
What Is a Credit Union?
Those who have only been exposed to large national financial institutions might not even know what a credit union is, much less the manyadvantages of joining a credit union. At their cores, credit unions were developed to help those who are either unbanked— accounting for 8.2 percent of U.S. households according to an FDIC survey— or who are underbanked, which 20.1 percent of U.S. households can be classified as. As nonprofit cooperatives, local credit unions operate on the principle of “people helping people.” Credit unions accomplish this mission by offering shares of the organization to each member who deposits into a share savings account. As a shareholder, members themselves dictate changes within the institution, as opposed to third-party investors simply looking to make a profit off of customers. Any earnings gained within the credit union are returned back to members in the form of competitive rates on deposit products like CD and savings accounts, affordable lending interest rates, and reduced or no service fees.
