The Best Credit Unions for 2021

As a result, credit unions typically have a strong focus on serving their membership and the community in which they operate. That community could be geographical, or it could be a community of thousands of employees from one or more partner companies. Some credit unions serve these communities by contributing to local projects, while others focus on providing quality banking products with the best rates they can offer. The best credit unions do both of these.

Is Your Money Safe in a Credit Union?

Yes, a credit union can be as safe a place for your hard-earned funds as a bank. That’s because, just like banks, the vast majority of credit unions are federally insured, providing protection on up to $250,000 in deposits per individual per institution. So if your credit union fails, all of your deposits up to this threshold are safe.

For banks, government backing is provided via the Federal Deposit Insurance Corporation, or FDIC, while credit unions are protected by the NCUA, or National Credit Union Administration.

What Is the Downside of a Credit Union?

The disadvantages to banking with a credit union are minimal. Though there are certainly some very small credit unions that may not offer as robust of an online or mobile customer interface compared to larger institutions, this is no different when comparing large versus small banks.

Similarly, some credit unions may not offer all of the products you desire. But again, you can experience this across the wide spectrum of banks as well. The key is simply to choose a credit union that offers a wide menu of products, and especially those you find most important.

Credit unions often pay higher interest rates and charge lower loan rates than many banks. But this is not always the case. In particular, one area where online banks tend to dominate physical banks and credit unions is in high-yield savings accounts.

Can I Be a Member of More Than One Credit Union?

There is no limit to how many credit unions you can join, with almost every credit union having the policy that “once a member, always a member.” So even if you no longer bank with a certain credit union, you may find that credit union useful to you in the future, and you will still be a member when you return for new business.

Joining multiple credit unions is a common strategy among those who want to maximize the rates they earn on each account type. For instance, retirees with a significant amount invested in CDs can be well served by holding certificates of different term lengths at different banks or credit unions.