Myth vs. Fact: What being a member of a credit union actually meansWritten by Meg Kramig
For some, when they hear they have to become a member of something to join, it adds a whole other level of anxiety. What does that mean? Do you have to pay dues, or is there a commitment of some sort?
So to dispel the myths and get to the facts, we’re here to explain what credit union membership means, and how it affects you.
What it takes to become a credit union member.
To become a member of a credit union, you have to have something in common with the other members as established by that particular credit union’s membership requirements. That could be as specific as having to be an employee of a certain business or as broad as having to live in a particular region.
To actually become a member, all you have to have is an account. That’s it. By having an account, that makes you a part owner, or in other words, member of the credit union. And as long as you hold that account, even if you move or change jobs, you maintain that membership.
So as a “member,” do you have to pay dues or something?
No. You absolutely do not. Unlike a gym where you are paying for a service, with a credit union, a membership instead means that you are a part owner, so no dues are required.
Another fact: Actually, as a credit union member, if your credit union reaches a surplus, they give the money back to you. So no, you don’t pay “dues” to be a member - but you do earn.
Sometimes you earn credit union profits back directly in the form of a yearly dividend, or sometimes it’s indirectly in the form of lower interest rates on loans and high-yielding savings accounts. Banks, on the other hand, give all of their profits to shareholders - which is why credit unions can consistently offer much lower interest rates than banks.
So are there any other requirements as a member?
Generally, there are annual meetings - but don’t worry. You aren’t required to attend. Though annual meetings can be a great way to meet people and credit unions do their best to make them fun, so you might actually end up wanting to go.
And these meetings are actually a great thing. As a not-for-profit, your membership means the credit union is required to give you an annual report of how they are spending their money and how much they’ve earned every single year, keeping them accountable to you and the other members.
So in short, becoming a member of a credit union is just as easy as joining a bank is - except with a lot more benefits.
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About MoveCU Inc.
MoveCU is the nation’s first credit union loan marketplace. Now users can instantly find, compare, apply for, and get pre-approval online in minutes on loans from credit unions around the U.S. Using their intuitive industry-leading technology, MoveCU is giving America’s smallest financial institutions a bigger voice and breathing new life into the credit union movement. For more information, visit our homepage.