If you’re on the hunt for a financial institution to keep your money safe and help you grow financially, you’ve likely come across a few credit unions. Much like a bank, a credit union lends customers money and provides a variety of financial services such as checking and savings accounts. However, they offer so much more than an account to deposit your money for safekeeping. We’re here to break down some of the benefits of banking with a credit union and how they serve their communities.
What is a credit union?
On the surface, credit unions are financial institutions that offer the same products and services as banks. At Amplify, for example, members can open a checking account, manage their retirement with the help of a financial advisor, or take out a mortgage or home equity loan – all services you would expect from a megabank. So what’s the difference between a bank and a credit union?
Not for profit, but for service.”
When you look beyond services and account features, the difference is clear. Credit unions are member-owned financial cooperatives whose operating philosophy is “not for profit, but for service.” Credit unions exist solely to serve their members and their local communities, and they do so by returning their profits to their members and reinvesting in their communities.
5 Benefits of a Credit Union
Not convinced a credit union is right for you? Here are five benefits that members experience.
1. Credit unions return profits to their members.
Banks are owned by shareholders who are people and companies that own stock in the bank. When banks profit, they return their profits to their shareholders.
Credit unions, on the other hand, are owned by their members who are people in your local community that have accounts and loans with the credit union. When credit unions profit, they return their profits to their members in the form of higher savings dividends, lower loan rates, and other perks like ATM Fee reimbursements. You’ll also find that savings and checking accounts often have fewer fees and minimum deposit requirements.
A credit union manages the pooled resources of their members, so every business decision they make is with their members’ best interests in mind.
2. Credit unions reinvest in their communities.
The money you deposit at a for-profit bank will likely leave the community in the form of profits for shareholders, executive bonuses, and even paying the bank’s legal fees. Last year alone, banks profited over $147 billion collectively.
When you deposit money at a credit union, your money stays in the local community and can be used to help a family get their first mortgage, finance a student’s education, or help a local business owner open a new store location. Because credit unions are not for profit, they thrive by reinvesting in their local communities.
How Amplify Credit Union Gives Back to the Community
One example of how credit unions give back is Amplify’s “A Safe Place to Call Home” program. Through volunteer involvement and philanthropic support, Amplify works to ensure the most basic needs of Central Texans are met. We have partnered with three local organizations to help provide safe and sustainable housing accommodations for our neighbors.
- Saint Louise House: Saint Louise House supports women-led families that are in need of housing but don’t meet minimum income requirements to qualify for other affordable housing programs. This organization offers stable housing, wraparound services with individualized support, and education opportunities.
- American Red Cross of Central & South Texas: When disaster strikes, the American Red Cross is there to provide care, shelter, basic necessities, and hope.
- Caritas of Austin: The mission of this organization is to prevent and end homelessness in Austin by providing a variety of services such as housing, food, education, and job placement to unhoused individuals.
By focusing our community efforts on these three organizations, we hope to build a long-lasting relationship and create meaningful impact.
3. Credit unions cooperate with each other.
If you’re thinking of banking with a credit union, you may be concerned about the lack of branch locations. Indeed, credit unions are most often local institutions and may not offer home branches outside of your region. However, as financial cooperatives, credit unions cooperate with each other in a way that for-profit banks cannot.
The biggest example of this cooperative principle is the national network of credit union service centers called the Co-Op Shared Branch Network, which allows credit unions members to visit designated Shared Branch locations to perform basic banking transactions. This means that, no matter where you are in the United States, you’re never far from a partner credit union to do your banking with.
When using this network, be sure to check their official branch locator. Not all credit unions are able to participate, and some limit their participation in specific ways.
4. There’s a focus on member experience and customer service.
Aside from the financial products and perks that credit unions offer, members typically receive exceptional customer service. When you bank at a credit union, you’re more than just another account number— you’re a community member and a neighbor!
Credit unions also usually offer a wide array of financial education resources for their members. It’s just another way that we can help you meet your financial needs and goals.
5. Members can benefit from a personalized lending experience.
Working with a local lender for your mortgage, business, and personal loan needs comes with a whole host of benefits. Some perks of taking out a mortgage or loan with a credit union include:
- Local relationships: If your lender is established in your area, they likely have a large network of other local professionals in your area. For instance, if you’re buying a house, choosing a lender that has strong relationships with real estate agents can help the homebuying process unfold smoothly and quickly.
- In-person guidance: The borrowing process can be stressful and confusing at times. It’s reassuring to know that there’s always someone to help you in person should you need it.
- Flexibility: You can get a loan from a big bank or other lender, but they’re far more likely to sell it to an investor. Banks and lenders can only sell a loan if it meets the guidelines set by the investor, typically stringent requirements that can disqualify great applicants with unusual financial situations. A credit union is more likely to keep loans instead of selling them, so they can set their own guidelines. This means they’re often able to work with borrowers who have unique financial situations or needs.
Credit unions are not-for-profit institutions, so they’re not focusing on maximizing profits for investors—they’re trying to help their members. With this top-notch flexibility, guidance, and service to their members, local lenders at credit unions take the stress out of the borrowing process.
Experience the Benefits of a Credit Union for Yourself
Choosing to bank with a credit union means reinvesting in yourself, your neighbors, and your community. Become a member of Amplify Credit Union Member today and experience the credit union difference!