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What Is a Credit Union

 

Think of it as a bank — but not-for-profit.

If you’ve gotten this far, you may be asking yourself things like ”What is a credit union?”, “Do I have to pay dues?”, and “Is this a legitimate organization?”

Here are a few answers for you. For starters, a credit union is an organization consisting of members with a common affiliation — for example, the employees of a company or a group of companies. There are no dues.

The first US credit union was founded in 1908 and the movement continues to grow. In fact, 1 out of every 9 people in America belongs to a credit union.

Credit Unions function in much the same way a bank does. They pay interest on members' deposits, and can loan money to other members.

Here’s the big difference between a bank and a credit union: while banks often have to answer to stockholders, credit unions exist only for the benefit of their members. Which is probably one of the reasons why, according to the latest American Banker/Gallup Consumer Survey, credit unions have topped all financial institutions for customer service for 21 years running.

Membership in a credit union is generally restricted to employees of affiliated SEGs (Select Employer Groups) and their immediate relatives. The benefits of membership are lifelong, and you can remain a member even if you move or change jobs.