And while Internet-only banks can offer the most competitive rates for saving and borrowing, credit unions offer a mix of favorable rates and personal service. They're often a good alternative to traditional banks, which still dominate the market.
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The American Bankers Association's own annual survey, in addition to other polls, consistently finds customers are more satisfied with credit unions than banks.
Credit unions are exempt from paying federal income taxes, which allows them to be competitive, despite being smaller than the megabanks. The banking industry says those advantages allow large credit unions to compete unfairly with traditional banks. But that can be a boon for consumers.
Traditionally, the major catch was qualifying for membership in a credit union. But nowadays, more people than ever are likely to qualify to join at least one credit union--and may be eligible for several.
Though the number of credit unions has been in a long-term decline--mostly due to consolidation, much like the banking industry--the United States is home to about 8,500 credit unions with some 88 million members, according to the National Credit Union Administration.
The main point before joining a credit union is to compare savings and loan rates, fees and product offerings with your bank.
Credit unions have downsides. Although they have made strides in breadth of services, most can't match the variety of services found at large banks and the convenience of robust branch and automated teller machine networks. And you have to search for a credit union you qualify for, as opposed to walking into any bank to open an account.
But there are reasons to consider doing business with a credit union:
-- You probably qualify to join.
A 1998 federal law loosened membership requirements for credit unions--you might qualify just because you live in a certain county or are a member of a particular church. To find out whether you qualify, ask your employer, family members who belong to a credit union or go online to credit union search sites, such as www.joinacu.org and www.ncua.gov/indexdata.html.
Most credit unions require a small savings account deposit to join. It could be as low as $5 for a lifetime membership. That means you retain membership even if you leave the employer, geographic region or association that qualified you to be a member.
-- Array of offerings.
While credit unions of previous generations offered a limited menu of services, such as savings accounts and short-term loans, large credit unions today have broader offerings. And unlike most Internet banks, you can talk face-to-face with someone to discuss your financial needs.
Today, some credit unions share their branches, meaning you can walk into any branch of a networked credit union to conduct business. Credit unions are members of ATM networks, giving you broader access to fast cash.
Many credit unions also give you access to electronic banking and bill-paying.
-- Savings rates.
A six-month certificate of deposit recently paid 4.74 percent at credit unions, on average, but 4.12 percent at traditional banks, according to market research firm Datatrac Corp., although rates of course vary by location and institution.