Credit unions offer the same services as banks. Benefits can include better interest rates and access to educational programs.
Updated Dec 9, 2020 · 1 min read Written by Melissa Lambarena Senior Writer Melissa LambarenaMelissa Lambarena is a senior writer on the credit cards team at NerdWallet. She has enthusiastically covered credit card-related topics for over seven years. Her prior experience includes nine years as a content creator for several publications and websites. Through her work, she aims to help readers extract value from credit cards to meet financial goals like stretching their budget, building credit, traveling to dream destinations and paying off debt. She explores these topics in the Millennial Money column featured in The Associated Press. Her work has also appeared in The New York Times, Chicago Tribune, The Washington Post, USA Today and Yahoo Finance, among others. Melissa has a bachelor’s degree in sociology from the University of California, Los Angeles.
Assigning Editor - Banking Carolyn KimballCarolyn has worked in newsrooms around the country as a reporter and editor. Her interests include personal finance, sci-fi novels and ridiculous Broadway musicals.
Fact Checked Co-written by Chanelle Bessette Lead Writer Chanelle Bessette
Lead Writer | Banking, checking Accounts, cash Management Accounts
Chanelle Bessette is a personal finance writer at NerdWallet covering banking. She previously worked at Fortune, Forbes and the Reno Gazette-Journal. Her expertise has appeared in The New York Times, Vox and Apartment Therapy.
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Credit unions are not-for-profit cooperative financial institutions owned by their members. They offer the same services as banks, but unlike banks, a credit union's profit is returned to members in the form of interest and other benefits. As a result, members typically benefit from better rates on deposit accounts.
Credit unions have membership requirements based on where you live, work or worship, or through associations or causes that you’re involved with.
Credit unions focus on helping members succeed financially. They're owned by members who vote and elect a volunteer board of directors.
Some membership requirements are easier to meet than others. If you qualify, you usually pay a one-time membership fee — sometimes as little as $5 — and you may need an opening deposit to fund your account.
At credit unions, the profits come back to members through educational programs, low fees, better rates on loans and higher rates on savings. One member’s money can become another member’s loan for a house, car or business.
Deposit accounts. The products and services at credit unions are similar to those found at banks, but sometimes the terminology is different. For example, “share draft accounts” are checking accounts, “share accounts” are savings accounts and “par value” is the minimum opening deposit.
Insurance for member funds. Deposits at federally chartered credit unions are insured by the National Credit Union Share Insurance Fund , which protects money the same way the Federal Deposit Insurance Corp. insures banks in case of failure. Members' deposits are insured up to $250,000 per ownership category.
Branches and ATMs. Credit unions tend to have their own branches and ATMs, but when they don’t, they may be able to offer them with the help of financial services technology by the Co-op organization. With Co-op, members of many credit unions can access their money through a network of about 30,000 ATMs — some of which include low fees internationally — and 5,600 shared branches.
Cash Management Money Market Learn MoreSoFi Checking and Savings
SoFi members with Direct Deposit or $5,000 or more in Qualifying Deposits during the 30-Day Evaluation Period can earn 4.50% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. Members without either Direct Deposit or Qualifying Deposits, during the 30-Day Evaluation Period will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Only SoFi members with direct deposit are eligible for other SoFi Plus benefits. Interest rates are variable and subject to change at any time. These rates are current as of 8/27/2024. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.
Min. balance for APY Learn MoreEverBank Performance℠ Savings
Min. balance for APY Learn MoreBarclays Tiered Savings Account
Min. balance for APYThese cash accounts combine services and features similar to checking, savings and/or investment accounts in one product. Cash management accounts are typically offered by non-bank financial institutions.
These cash accounts combine services and features similar to checking, savings and/or investment accounts in one product. Cash management accounts are typically offered by non-bank financial institutions.
Learn Moreon Wealthfront's website
Wealthfront Cash Account
Min. balance for APY Learn Moreon Betterment's website
Betterment Cash Reserve – Paid non-client promotion
*Current promotional rate; annual percentage yield (variable) is 5.50% as of 4/2/24, plus a .50% boost available as a special offer with qualifying deposit. Terms apply; if the base APY increases or decreases, you’ll get the .75% boost on the updated rate. Cash Reserve is only available to clients of Betterment LLC, which is not a bank; cash transfers to program banks conducted through clients’ brokerage accounts at Betterment Securities.
Min. balance for APYCDs (certificates of deposit) are a type of savings account with a fixed rate and term, and usually have higher interest rates than regular savings accounts.
CDs (certificates of deposit) are a type of savings account with a fixed rate and term, and usually have higher interest rates than regular savings accounts.
Read reviewMarcus by Goldman Sachs High-Yield CD
4.70% APY (annual percentage yield) as of 08/30/2024
Federally insured by NCUA
Alliant Credit Union Certificate
Annual Percentage Yield (APY) is accurate as of 08/20/2024
Checking accounts are used for day-to-day cash deposits and withdrawals. Checking accounts are used for day-to-day cash deposits and withdrawals.
Discover® Cashback Debit
Chase Total Checking®
Deposits are FDIC Insured
Chime Checking Account
Monthly fee Money market accounts pay rates similar to savings accounts and have some checking features. Money market accounts pay rates similar to savings accounts and have some checking features.
Discover® Money Market Account
» Want details on how a network like this works? See more about shared branch credit unions
Solid customer service. Even with technological support, some credit unions may lag behind in the latest online or mobile banking technology , but customer service tends to be one of their strengths. For the past five years, they've ranked slightly higher than banks in this category, according to the American Customer Service Index.
Some state-chartered credit unions are privately insured and aren't backed by the full faith and credit of the U.S. government, as federally chartered credit unions are. Also, some credit unions have very specific membership requirements, such as military- and company-based credit unions.
There are 5,164 federally insured credit unions with over 120 million members. To find out whether your deposits are federally insured, visit the National Credit Union Administration’s credit union locator .
As with any financial product or service, make sure you evaluate factors such as fees, interest rates, convenience, access and available services before you become a member at a particular credit union.
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