With today’s economic environment, the public is looking for better service and opportunity from their financial institutions. Where they bank, who they do business with and what opportunities are made available is becoming increasingly important. When it comes to financial services, more and more people are finding credit unions to be a favorable choice.
What makes a credit union favorable? Credit unions are similar to traditional banks but offer better options.Governed by members with a volunteer board of directors, credit unions focus on helping members develop a strong financial foundation. A credit union is a not-for-profit organization, which passes through the profits of the organization to their members in terms of benefits. “Our members not only bank at Suffolk Federal, they own and operate our institution. Our sole focus is to help our members achieve greater financial stability,” explains Ralph D. Spencer, Jr., President and CEO of Suffolk Federal, a leading credit union located in Suffolk County, New York.
According to the Credit Union National Association, New York credit unions offer many member benefits including lower average loan rates on new and used car loans, personal unsecured loans, first mortgage loans, home equity loans and credit card loans. New York credit unions also pay members higher-than-average dividends on savings, checking, money market accounts, certificate accounts and IRAs.
Membership in a credit union might depend on belonging to a community or industry. For example, Suffolk Federal, offers membership to anyone who lives, works, worships, attends school or regularly conducts business in Suffolk County as well as immediate family members of current membership. “Our credit union was built 50 years ago to serve our community with the best and most effective financial opportunities available and that commitment continues today. Our sole focus is to provide better banking options and opportunities for our members,” Spencer explained.
Options which make credit unions favorable to do business with include:
- Stronger Interest Rate and Lower Fees: Credit unions offer the same financial products as banks, but they are more economically priced. Credit unions tend to offer lower APRs on mortgages, personal loans, and credit cards. Most people use their local credit union for car purchases because the rate is typically lower than dealer financing and because commercial banks are normally a percentage point or two higher than credit unions.
- No Fees for Standard Services: Credit unions have fewer fees compared to national banks. In fact, most credit unions offer checks, withdrawals, and electronic transactions free of charge. Many also offer checking accounts with no minimum balance and without monthly account servicing charges.
- You Are a Stakeholder in the Credit Union: With traditional banks, the board of directors are focused on making as large a profit as possible. This direction tends to contradict the goals of its customers, who want to enjoy low rates, fees, and the best customer service possible. To provide this level of service, banks must cut into their profits, which they are not inclined to do. Credit unions have more incentive to provide low rates, fees, and stronger customer service.
- Personalized Service and Accessibility: Because credit unions may be local and are more member-centric, they can offer fast and personal service. If a member visits the branch often, that member can develop a working relationship and often receive personalized service from the same person – something large banks have a hard time offering
- Commitment to Members: Because credit unions subscribe to a member-focused philosophy, they are more willing to work with the member even if a member may have a troubled financial past. A credit union may also make exceptions for existing members in good standing should any unexpected issues arise with an application for a loan or credit.
- Insurance of Assets: Credit unions are usually insured by the (federal) National Credit Union Administration. This means that a credit union has similar protections that the Federal Deposit Insurance Corporation offers to banks, which includes insurance coverage on deposits to $250,000.
- Financial Education Resources: Credit unions can be a prime resource for financial information and education. Suffolk Federal, for example, offers the community a powerful, innovative resource to bring financial literacy to adult learners with their Financial Empowerment: Online Workshop. This enables individuals of all levels to develop strong financial skillsets to successfully take control and manage their finances in an effective manner.
- Abundance of Resources, Perks and Tools: Credit unions can offer a variety of perks and resources for its members. Suffolk Federal empowers its membership by offering a unique financial counseling service through their strategic partnership with GreenPath, a financial counseling and education organization program. Other advantages include access to such items as innovative app tools, seminars, programs to encourage savings, scholarship opportunities and much more. The credit union is also committed to assisting their members with ongoing issues on a timely basis. For example, responding to the recent concern over identity theft, the credit union began offering members CardLock and CardValet, which place complete debit and credit card control, fraud mitigation and security in members’ hands. When used together with Suffolk Federal’s Digital Wallet, members receive an extra level of security.
Overall, credit unions are structured to ensure they are invested in their membership’s personal and professional financial success. With their commitment to the membership and the abundance of options they offer, it would seem doing business with a credit union makes good financial sense.