7 Frequently Asked Questions About Joining a Credit Union
Making decisions about personal financial health and well-being is important to you, and one of the most important decisions to make is where to do your everyday banking. With so many options, benefits, and advantages available, your choices in financial institutions may seem overwhelming and confusing. Should you choose an online-only bank or one with brick-and-mortar branches? Is a bank a good fit for your needs, or does a credit union better serve your interests?
You deserve straightforward answers and a financial institution with the necessary products and services. We at Lanco Federal Credit Union want to help you decide if joining a credit union is right for you. The following information will allow you to gain some clarity about our not-for-profit, member-owned financial cooperative. If you feel our credit union is a good fit, you can apply online to become a member and open an account.
1. How Do I Join a Credit Union?
The primary function of a credit union is to serve its members. Like a traditional bank, credit unions offer various banking services, including checking, savings, and loans. While membership requirements exist to join, a credit union’s members enjoy benefits such as higher dividends on savings products and lower interest rates on loans and lines of credit.
Since the mutual goal of a credit union’s membership is to ensure the financial well-being of all its members, the participants have something in common, such as:
- Geographic location: some credit unions place membership boundaries based on living, working, worshipping, or attending school in a particular area.
- Employer-sponsored program: some employers offer credit union membership as an employee benefit.
- Association with or membership in a group: some examples of groups that may associate with a credit union include schools, nonprofit organizations, or military branches.
- Family: if an individual belongs to a credit union or meets membership eligibility requirements, eligibility to join may be extended to that person’s immediate family members.
If you qualify under one of these categories, you can apply for membership to join a credit union. The typical cost to establish a membership account is low. Some credit unions have application fees, but many allow you to join with no fee. Minimum deposits generally fall between $5 and $25.
For example, at Lanco FCU, our field of membership includes people who live, work, worship, or learn in Lancaster County, Pennsylvania. Immediate family members or household members of eligible persons can join our credit union.*
Additionally, businesses and other legal entities within the community boundaries may also qualify for membership. We have no application fee, and your membership share deposit is only $5.
2. Is a Credit Union a Safe Place for My Money?
Credit unions have insurance on member deposits and are undoubtedly safe places to keep your money. Similar to how deposits in a traditional bank are covered by the Federal Deposit Insurance Corporation (FDIC), deposits in a federally insured credit union are covered by the National Credit Union Administration (NCUA).
Federal Credit union deposits are insured up to $250,000 per member by the National Credit Union Share Insurance Fund (NCUSIF), which is backed by the full faith and credit of the United States government.
3. What Should I Know About Checking and Savings Accounts at Credit Unions?
Checking and savings accounts are often called “share accounts” at a credit union. Share savings accounts pay dividends, similar to interest, while checking (“share draft”) accounts are used for everyday spending.
Before joining a credit union, ask their member service team about any minimum balance requirements or transaction limitations. You’ll likely find that, when compared to banks, the checking and savings accounts at credit unions generally offer lower fees and minimum balance requirements. Other important questions to ask include the availability of funds after deposit and if there are any fees associated with the accounts and services you’re interested in using.
4. Is My Credit Union Up to Date with Technology?
You may be surprised to find that many credit unions offer the same electronic services that you would expect from a bank. But all credit unions differ, so it is important to check the available technology that is important for you. For example,
- Does the credit union offer online banking and a mobile app, and are there any associated fees?
- How accessible are ATMs, and are there fees associated with ATMs not connected with the branch? Will the credit union reimburse fees charged by out-of-network ATMs?
- Does the credit union offer notifications via e-mail or text message to alert you of account changes or transaction activity?
- Does the credit union offer bill pay, and are there any fees or limitations? Can you pay bills with the mobile app?
Having a credit union that offers the products and services you need is essential to finding the right financial company for you. If you are a potential member who wants to join our credit union and have questions regarding our services and technology, please stop by one of our branches or contact us for answers.
5. What Are the Current Interest Rates at Credit Unions?
Because credit unions return profits to members, you will typically find better dividend rates on savings and lower interest rates on loans when compared to those offered at traditional banks. Still, it is a good idea to shop around and compare rates before committing to a loan or savings product. Many credit unions will provide a quote of your eligible rates based on your credit score.
For example, if you financed a car at a bank, you may be paying a higher interest rate than if you were to finance one with a credit union. You may have options to refinance your car loan with a credit union, such as Lanco FCU. You can also view our current rates for all lending and savings products.
6. What Products Do Credit Unions Offer?
As financial institutions, credit unions can offer various types of personal and business banking services, including:
- Checking Accounts
- Savings Accounts
- Debit Cards
- Secured Loans, including auto loans, home equity loans and lines of credit, and mortgages
- Unsecured Loans, including credit cards, personal loans and lines of credit, and student loans
Since credit unions are not-for-profit organizations, excess earnings are returned to members through lower interest rates and fees. Because of their slim profit margins, credit unions can offer more products at more competitive rates than banks. Banks, on the other hand, pay excess earnings to shareholders, not to account holders.
7. Are There Any Non-Banking Benefits of Credit Union Membership?
By the very nature of a credit union, cooperation and thrift are important values. Therefore, membership often includes benefits that cover more than just banking products. The benefits of a credit union membership may also include the following:
- Discounts and special offers through partnered companies, such as club memberships, phone plans, and insurance products
- Notary signature service
Of course, these optional benefits are just added perks to the advantages already gained from participating in a credit union with member-focused values and service. When you join Lanco FCU, you’ll enjoy all these perks and more.
Your next personal finance choices
Whether your financial goal is to move your funds to a credit union or to enhance your existing financial well-being with added benefits, you should now be well-equipped to make the right decision for your specific financial needs. If you have decided that joining a credit union is best for you, and you’re someone who lives, works, worships, or learns in Lancaster County, PA, then we invite you to join Lanco FCU!
We Bank on Relationships
If you have ties to Lancaster, you’re likely eligible to join our credit union family of member-owners! Lanco FCU is a not-for-profit financial institution owned by more than 10,000 members. Because we’re in business to benefit our members (not shareholders), we return excess earnings through benefits, including competitive rates on deposits and loans, free rewards programs, free convenience services, low fees, and so much more. Become a Lanco FCU member and enjoy the benefits of your local credit union.
If you want to review further how to find the right credit union for you, explore our infographic here.
*Immediate family members include spouse, child, sibling, parent, grandparent, or grandchild. This also includes stepparents, stepchildren, stepsiblings, and adoptions. Household members are people living in the same residence as a single economic unit.