An excellent alternative to holding a bank account is to go in for an account with a credit union. A credit union is a financial services entity quite similar to banks in its operations, except that the ownership lies in the hands of all the depositors themselves. What this means is that as a member of a credit union, you have a stake in the ownership of the union, to the extent of the number and amount of deposits you hold. Can anyone become a member of a credit union? You can, provided you fulfill certain conditions, which are part of the charter for establishing a credit union. Unlike banks, which are open to the public at large, credit unions have a more limited membership.
A credit union aims to provide financial services to a group of people who share a common characteristic. This could be based on residence in a specified area, where the union is located or undertakes its operations. It could be based on a common guild, such as all members are teachers, or construction workers and so on. Any individual who fulfills the conditions particular to the credit union he or she wants to join, can do so. Presuming that you match the criteria for membership, here's how you can open a credit union account:
- First, look for a credit union where the membership conditions match your profile. You can search for existing credit unions through the local yellow pages for your area, or browse through the National Credit Union Association (NCUA) listing for a credit union where you qualify for membership.
- Carry the necessary identification documents to open a credit union account, along with a check or cash for the initial deposit required to open an account.
- Fill out the application form and make a note of the requirements for operating the account - initial deposit, minimum balance to be maintained, etc.
- The credit union may or may not check your credit rating and/or if you have a history of passing bad checks, so it makes sense to ensure you have a clean record before you venture out to open an account.
- Once the account is opened, operations are simple and akin to maintaining a bank account.
Thus, opening a credit union account is quite simple and most credit unions offer very competitive rates when compared with a bank or private financial services company. However, the range of services may be limited when compared to the former, but as long as your basic banking needs are covered, that shouldn't matter.
Some of the services credit unions do offer include vehicle loans, salary loans, online bill payment facilities, direct deposit of your salary checks, personal loans, etc. Credit unions also offer great options for your child's savings account, or for putting away money for their future education via CDs or other fixed income products. Your money is also safe, since credit unions are covered by the same guarantees and backing as bank accounts, under the National Credit Union Share Insurance Fund. Check that the credit union you've selected is covered under this scheme, and you can bank without any fears or worry about the safety of your money!