What IS A Credit Union?

Posted on May 4th, 2017 | Budgeting

Choosing your financial institution is one of several important decisions you make in your life. Would you believe it if I told you that people put more thought into what they add to their Netflix queue than where they keep their money? Well you should, because that’s an unfortunate truth. 

I didn’t have a bank account until I got my first job when I was 16. Lucky for me, there was a credit union located inside of my high school and that made the most sense to me. I could pick my paycheck up at work and deposit it during lunch the next day. Little did I know that this convenience factor would help me make one of the best decisions ever. 

Whether you are established somewhere and are looking to switch, or are opening your first account – I’m here to help with your decision. 

What’s the difference between a bank and a credit union?

Banks are for-profit, while credit unions are member-owned and operated. This means that banks have numerous expenses that credit unions simply don’t have. Banks are set up in a way that allows a select group of people to make money off of your banking activity. Credit unions are set up in a way that allows all of their members to benefit from their profits. 

Am I eligible for an account? 

Banks are open to anyone and everyone. Credit unions have membership requirements. Those requirements can be as simple as living in the community or attending a school in the community. Don’t let the fear of not being eligible keep you away!

How much do I need to get started?

Credit unions were designed to be cooperative financial institutions for people who share a common bond. To join a credit union, you purchase a share (usually only $5). This $5 remains in your savings account for the duration of your membership. This is not the same as a fee or minimum balance requirement. Purchasing a share makes you a member-owner of the credit union. Purdue Federal Credit Union doesn’t have a minimum balance requirement for checking accounts – and sometimes as college students, we need that flexibility. 

Will I have good access to ATMs?

In the grand scheme of things, you might think larger bank ATMs are everywhere, but credit union ATMs are just as accessible. In fact, the largest credit union ATM network has more surcharge-free ATMs than nearly any bank1. Click HERE to see surcharge-free ATMs near you.  

Those are just a few of many things that set credit unions and banks apart. Do you like what you see? Click HERE for more frequently asked questions about credit unions (specifically Purdue Federal Credit Union). 

Do you still have questions? Feel free to call or visit a branch location most convenient to you and get all of your questions answered. 

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1Claim based on CO-OP ATM Network website comparisons as of March 16, 2017