The short answer to the question in the title is yes, credit unions offer their products and services only to their members. Here is how these financial institutions work and what to expect if you are eligible to join a credit union.
What Are Credit Unions
Credit unions are special types of financial institutions called cooperatives formed by people who share some sort of affiliation or interest, for example, they belong to the same community, they have the same profession or they work for the same employer – that shared feature is considered to be a guarantee that all the members of the union have the union’s best interest at heart. The people who form the credit union are called members and they are also the owners of the credit union. Like any founder of an organization, credit union members also have the right to know how their organization is performing, therefore every credit union organizes an annual general meeting, where the union’s results are presented and the attending members can participate in discussions regarding important decisions to make for the future.
The income of credit unions comes from members lending money with interest rates to other members. Credit unions are not-for-profit organizations, which means that any profit made during the financial year goes toward improving the union’s products and services and towards annual dividend payments made to the members.
How to Become a Credit Union Member
The affiliation or features shared by the members of a credit union is called the common bond – anyone who shares that bond can become a member. Most credit unions require aspiring adult members to provide a proof if identity through a photo ID, such as a driving license or passport and proof of address with a utility bill or a bank statement that is not older than 6 months. Many credit unions have children’s accounts as well – anyone who wants to open an account for a child needs to provide the child’s birth certificate or passport and the photo ID and proof address of the adult who is opening the account for the child, usually a parent or a guardian.
How to Save Money with Your Credit Union Account
Most credit unions provide members with multiple options to put money into their accounts. Some of the most popular options include online transfers from accounts held in other financial institutions, such as a bank and wages sent directly to the credit union account.
The Services Provided by Credit Unions
A trustworthy Castle Rock credit union offers many financial products that are very similar to the products offered by banks. The range includes deposit accounts, credits and many other services. What makes credit unions such great options is that the interest rates and the other conditions they practice on their loans are much more favorable than the conditions offered by banks. Credit unions also offer a much more personal approach to handling the member’s financing, with personal contact between the union’s consultant and the member and with financial education involved as well.