American Express coined the slogan, “Membership has its privileges,” and that slogan couldn’t be truer than when you are a member of a credit union. Unlike banks, which will accept anyone as a customer, you need to qualify to join a credit union. There are usually certain conditions you have to meet to qualify, and as soon as you join, credit union membership offers a wide range of perks that will make you glad you chose to become a member.
There is still some confusion about the differences between banks and credit unions. The biggest difference is that credit unions are not-for-profit, while banks are for-profit institutions. Banks operate as businesses and are expected to generate profits for shareholders, so when you do business with a bank, you are considered a customer. Credit unions, however, answer to their members, who benefit from their credit union’s success. With membership, you have a share in the credit union, similarly to how you would as a member of a co-op.
Being Part of a Credit Union Community
Credit unions offer many of the services that banks do, including savings, checking, credit cards, loans, retirement planning, and much more. Because banks are for-profit, they make their money by using their customers’ money, which means revenue from interest rates and fees. Credit unions, however, are customer owned, and so they usually offer higher interest returns, lower loan rates, and lower or no fees when compared to those of banks. Credit unions were specially formed to meet the financial needs of members, which means they offer better rates and better service.
According to the Credit Union National Association (CUNA), credit union members in the state of Washington averaged $72 in benefits per member and $150 per household in the third quarter of 2018. That’s in addition to benefits such as lower interest rates on loans and higher interest rates on deposits than those of most banks.
Credit unions were originally formed as a way to get around the high interest rates charged by banks. Rather than paying the banks, people with common interests would pool their money and form their own lending institution. iQ Credit Union, for example, was started in 1940 by a group of school teachers with a shoebox. That’s why credit union membership usually requires you to be part of a special-interest group or community, whether that community is defined by geography, profession, or other criteria.
When you join a credit union, you become part of an institution that gives back to the community. In addition to the benefits you receive as a member, your money also goes toward helping the community. At iQ Credit Union, for example, we have financial education programs for everyone, including classroom programs, financial literacy programs, and educational support for small businesses. iQ also provides support for community charities such as the Northwest Association of Blind Athletes. Our credit union staff even donate their time and sometimes part of their paycheck toward giving back to the community.
Personal Perks for iQ Membership
Of course, belonging to a credit union offers a variety of membership perks, as well. Here are just a few of the benefits we offer to iQ Credit Union members:
Better rates on car loans.
iQ Credit Union qualifying members receive an additional 0.25% off auto loans. Most credit unions can offer members a better deal on auto loans, and other types of loans, for that matter. And because iQ Credit Union is an active member of the business community, we also have arrangements with most car dealers so that you can get the same great loan terms at the dealership that you do at your local credit union branch or online.
Home loan benefits.
If you are shopping for a new home, you can get a great mortgage rate from your credit union. And at iQ Credit Union, we also take $250 off closing costs for qualifying members. Credit unions like iQ are committed to offering members superior service, so in addition to great rates on home loans we can also help you research the market, find a real estate agent, and get cash rewards (averaging $1,500) with our HomeAdvantage® program.
Cash back on home equity loans.
If you already own a home, you may be considering refinancing or taking out a home equity loan. In addition to competitive rates, iQ qualifying members get $125 off closing costs. iQ also offers homeowners insurance as well as other types of insurance through insureQ.
Higher dividends on CDs.
Certificates of deposit (CDs) are a good way to earn more interest on your savings. CDs offer a higher yield in exchange for a commitment to save your money for a specified period of time. iQ qualifying members get the added bonus of a 0.25% higher APY on dividend rates for CDs.
When you join a credit union, you become part of a nonprofit group committed to serving its members and its community. There are many member benefits that accompany that commitment, such as the iQ membership perks listed here.
If you want to learn more about the benefits of credit union membership, be sure to check out our credit union Switch Kit Checklist. It will help you understand the many benefits of credit union membership and give you more reasons to make the switch.