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How to Join a Credit Union in the U.S.


A credit union is a member-owned financial cooperative that provides banking services, such as savings accounts, loans, and other financial products, to its members. These members often share a common characteristic like employment, location, or membership in a specific organization. Whether you’re considering a switch from a conventional bank or simply exploring your financial options, understanding how to join a credit union can help you make a more informed decision.

If you need help managing your finances, including investments and retirement savings, consider working with a financial advisor.

What Is a Credit Union?

Credit unions are unique financial institutions that cater to the needs of members. Unlike banks, which are for-profit entities owned by shareholders aiming to maximize wealth, credit unions stand as not-for-profit cooperatives owned and controlled by the very individuals who use their services.

At its core, a credit union’s mission is to offer a safe and convenient place for members to save money and access loans at reasonable rates. Profits are typically dumped back into the institution to enhance services or returned to members through lower fees, superior interest rates and dividends. This model contrasts traditional banks, where profits are funneled to shareholders.

Each member in a credit union, irrespective of their financial contribution, typically has an equal vote in electing the board of directors, thereby ensuring that the credit union’s policies and practices are in the best interest of its members.

Membership is often based on a common bond, such as:

  • Geographical location, including living in a specific county or city.
  • Employment at a particular company
  • Belonging to a certain industry or profession
  • Membership in a group like a church, school or labor union
  • Familial connections to existing members

Credit unions provide a range of financial products akin to those offered by traditional banks. Members can open savings and checking accounts with typically lower fees and minimum balance requirements. They also offer various loan products, including personal and auto loans, as well as mortgages, with competitive interest rates that may be lower than those provided by banks.

Moreover, many credit unions issue credit cards, offer certificates of deposit (CDs) and provide access to ATMs and online banking, ensuring members have a full spectrum of financial services at their disposal.

How to Join a Credit Union

Joining a credit union is different from opening an account at a bank, as there are certain eligibility and initial investment requirements associated with credit union membership. Here’s a closer look at process:

1. Determine Your Eligibility

To become a member of a credit union, one must first determine whether they meet the institution’s eligibility criteria. These criteria can vary significantly from one credit union to another but often include factors such as geographic residency, employment by a specific company or affiliation with a particular organization or association.

For example, some credit unions cater exclusively to federal government employees, while others are open to individuals who live within a defined county or region. Furthermore, many credit unions extend membership to immediate family members of current members, thereby broadening their potential membership base. Understanding these eligibility requirements will help you determine whether you can proceed with the application process. Once you’ve confirmed your eligibility, the next step is to explore your available options.

2. Research Credit Unions

Each credit union presents a distinct set of services, fee structures and benefits for its members. Prospective members should utilize resources such as the National Credit Union Administration (NCUA) online database, which provides information on the financial health and stability of credit unions. Additionally, local community directories, personal experiences and recommendations from financial advisors can be invaluable in assessing customer satisfaction and the range of products offered by different credit unions. This research is essential in identifying a credit union that aligns with your financial needs and preferences.

3. Apply for Membership

The application process for joining a credit union typically involves completing a membership form and submitting the necessary documentation. Applicants are usually required to provide a government-issued identification, such as a driver’s license or passport, proof of eligibility like a pay stub or a membership card from an affiliated organization – and occasionally a Social Security card.

The credit union will review the application to verify that you meet all membership criteria before granting approval. Make sure all of your documentation is accurate and complete to avoid any delays in the approval process.

4. Make Initial Deposit

Once your application has been approved, the next step is to make an initial financial deposit. This deposit is significant as it represents your share in the credit union and is the key to unlocking access to the full suite of member benefits.

The required amount for this deposit can vary, with some institutions requiring a nominal sum of $5, while others may require a higher amount. Prospective members should clarify whether this deposit is solely a membership fee or if it will also serve as the opening balance for their new account. This initial deposit is more than a formality – it’s a foundational part of establishing membership and may vary depending on the credit union’s requirements.

5. Open Your Accounts

With the initial deposit made and membership confirmed, individuals can then proceed to open various types of accounts with the credit union. These may include savings accounts, checking accounts and loan products. The process typically involves a consultation with a credit union representative to determine which accounts are most suitable for the member’s financial objectives.

For example, a member with long-term savings goals may be interested in a high-yield savings account, while another seeking convenience for daily transactions may prefer a checking account with low fees and robust online banking features. It is through this personalized service that credit unions distinguish themselves and provide value to their members.

Are There Credit Requirements to Join a Credit Union?

A credit union employee helps a member apply for a home loan.

Access to a credit union is typically based on member affiliation rather than financial metrics like credit scores. However, credit scores and credit history become more relevant when accessing certain products or services. For example, a credit union might not require a credit check for opening a savings account or becoming a member, but these factors will likely come into play when applying for a loan or credit card. At this point, your credit history and score are considered to assess your creditworthiness and the terms of the loan.

Although it’s a common misconception that credit unions disregard credit entirely, they do engage in prudent lending practices. They may offer more flexibility and personalized service than traditional banks, which can be a significant advantage.

This means that while your credit history may not prevent you from joining a credit union, it can affect the conditions under which you borrow or access other financial services. It’s crucial for potential members to recognize that credit unions, while accommodating, maintain responsible financial standards to benefit all members.

How to Choose a Credit Union

When considering joining a credit union, it is imperative to first evaluate your financial needs and objectives. Understanding your personal financial situation is crucial as it will significantly influence your choice of credit union.

For example, if you are focused on saving for retirement, you may seek a credit union that offers high-yield savings accounts or IRAs. Conversely, if you are building an emergency fund, your priority might be to find a credit union with minimal monthly maintenance fees and easy access to funds. Those planning to finance a home would benefit from a credit union that is known for offering competitive mortgage rates and a streamlined loan application process.

Each financial goal necessitates specific services and products, and credit unions may provide these in various ways that are tailored to their members’ needs. It is therefore essential to conduct a thorough assessment of your financial goals to ensure that the credit union you choose can adequately support your financial journey.

Here are some key factors to consider, when choosing a credit union:

  • Fee structures for account maintenance, ATM usage and overdrafts.
  • Loan rates for personal, auto and home loans.
  • Account types, including checking, savings, certificates of deposit (CDs), and money market accounts.
  • Digital banking capabilities for convenient access to funds and account management
  • Membership eligibility requirements, which often cater to specific communities, employers, or geographic locations.
  • Commitment to the local economy, including community involvement through financial education programs and local investment initiatives.

Benefits of Joining a Credit Union

A woman speaks with a customer service representative at her credit union.

As you can tell, there can be significant advantages to joining a credit union. The main benefits include:

  • Lower fees and better rates: Credit unions typically offer lower fees on accounts and loans and better rates on savings because they aim to serve their members rather than make a profit.
  • Customer service: With a focus on member satisfaction, credit unions often provide more personalized customer service.
  • Community involvement: Credit unions frequently invest in local communities through educational programs, charitable contributions and support for local businesses.
  • Democratic structure: Credit unions allow members to vote on important decisions, including who serves on the board of directors. This democratic structure can help align the operations of the credit union with the interests of its members.

Drawbacks of Joining a Credit Union

However, there are potential drawbacks to joining a credit union that you’ll also want to consider. These pitfalls include:

  • Limited accessibility: Credit unions may have fewer branches and ATMs than national banks, which can be inconvenient for those who travel frequently or do not live near a credit union branch.
  • Membership requirements: A credit union’s membership requirements can limit access for individuals who do not meet these criteria.
  • Technology and services: While many credit unions have made strides in modernizing their services, they may still lag behind larger banks in terms of technology, such as mobile banking apps and the breadth of financial products offered.
  • Risk of closure: Smaller credit unions face higher risks of closure if they struggle financially, which can be a concern for members. However, the National Credit Union Administration (NCUA) insures deposits up to $250,000, like the FDIC’s protection for banks.

Bottom Line

Joining a credit union can be a financially savvy move for those seeking a member-centric banking experience that can align with their values and supports their financial goals. But prospective members should consider their financial needs, research available credit unions and understand the eligibility requirements to make an informed decision.

Banking Tips

  • Building an emergency fund is an important first step to take toward achieving financial stability. Your emergency fund should be kept in a savings or checking account – or another easily accessible, highly liquid account. However, shop around and find an an account that will put your money to work for you. A high-yield savings account can keep your money safe and earn you much more interest than a traditional savings account.
  • A financial advisor can help you figure out how much to save and invest each month, given your goals. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

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