A credit union is a certain non-profit organisation that is maintained and created by a particular group of members. There are different types of credit unions in America depending on your basic financial needs. Their members are in some way the de-facto owners and all the necessary decisions are handled by keeping in mind the members’ mutual interest. The credit unions’ easy to approve financial loans, lower interest rates, reduced fees and the aspect of not making profits over the members’ money is making them ideal for saving your earnings. It is rather not easy to join a credit union, you have to surpass certain basic conditions and after that, the democratic member control is something that can earn you maximum profits on your savings.
Here is the list of different types of Credit Unions in America:
1. Employer Credit Union
It is the type of credit unions sponsored by the employers for its employees. It usually does not limit to a specific organization, there can be different credit unions in different field areas. For e.g, a group of teachers can be a member of credit unions created by their subordinate that solely focuses on their benefits without any monetary profit of the in charge. Similarly the workers, policemen, firemen can be the members of credit unions in their particular field.
2. Group Credit Union
Group credit union is one of the most common credit union on the list of different types of Credit Unions in America. Any kind of fraternal organization can open a credit union for the welfare of its members and work towards the groups’ mutual interests. For e.g, you can consider a church opening a credit union for its loyal members and offer them lower interest rates on loans and more on their savings. You need to clear certain ground rules to be a part of a closed group credit union. Military credit unions can be another example we can consider for such category.
3. Local Credit Unions
These credit unions are limited to a particular city or an area. For e.g, all the members of a certain small city and easily and safely borrow, ask for a loan approval or even save their extra cash at the local credit unions which will work entirely towards their benefits. You need to have an identity proof of residency of that particular city for being a member and certain other conditions.
4. Federal Credit Unions
These are legalised under the Federal Credit Union Act of 1934 in the United States which allow the members with several non-profit benefits and to make credit widely available within their reach. The members of the group include several volunteers, their families, elected officials and more. The minimum age for joining the federal credit union is 18 years and a permanent U.S residency is mandatory. The different types of Credit Unions in America are only created for offering their members better financial services at lower rates as compared to banks.
Do check out our blog post on Best Banks in America for Small Businesses.