The Truth about Credit Unions: Eight Common Myths Debunked
Any time you open a new savings account, take out a loan, or open a new investment account, you are faced with a decision. Unfortunately, many people miss out on great financial benefits because they simply don’t understand what all their options are. We’re here to set the record straight! Here is the truth about eight common myths about credit unions that could be keeping you from a better banking experience.
1. Credit Unions Are Not Difficult to Join
One hang-up many people have is that credit unions do have membership requirements that can sometimes be more restrictive than those at large banks. However, that doesn’t mean that a person would not be able to find a credit union they are qualified to join. At First Service, we offer several avenues for membership eligibility, making it easy for nearly anyone to become a member:
- Live, work, worship, or study in Harris County, Waller County, Fort Bend County, Conroe ISD, or Magnolia ISD
- Have a family member that is an existing First Service member.
- Be an employee of any of our Select Employee Groups, including KBR, Halliburton, CenterPoint Energy, Baker Hughes, NRG, and Kinder Morgan.
- Make a donation to our friends at the You First Foundation
Pro-Tip: First Service makes it easy to become a member by providing a completely online experience. Join online today with an opening deposit as little as $6.
2. Credit Unions Make it Easy to Access Your Money
Many credit unions focus on their local communities. From the outside looking in, this could make it look like there aren’t many ways for a member to access their accounts. Looks can be deceiving. Because credit unions are not-for-profit financial cooperatives, many of them are a part of one or more expansive credit union networks that enable their members to visit a multitude of partner credit union branches and ATMs all across the country.
At First Service, our members enjoy access to their accounts at over 5,000 credit union branches and nearly 30,000 ATMs. Whether you’re in Houston, Los Angeles, New York, or somewhere in between, there is bound to be a credit union nearby where you can conduct your First Service business.
As if that weren’t enough, many credit unions also offer sophisticated digital banking services that allow members to do all this and more – from anywhere:
- Manage accounts
- Access funds
- Pay bills
- Initiate transfers
- Utilize mobile wallet technology
- Deposit checks from a mobile device
3. Credit Unions Can Offer Many Services
People are often surprised to learn how many credit unions are full service financial institutions. It’s not uncommon for credit unions to be considered places to go for competitive rates on loans, but did you know that many also offer a menu of services that can go head to head with even the largest banks? Whether you’re looking for a checking or savings account, help with insurance, or even wealth management services, credit unions like First Service are able to provide what you need. We even offer a full catalog of business checking, savings, commercial loans, and more to help support small and medium businesses in our community.
4. Credit Unions Offer Great Perks
In addition to the full range of services that a credit union can provide, you may also be surprised to learn that many offer comparable or even better perks that banks do. One of the benefits you might expect from belonging to a credit union is that you can count on receiving personalized service. But did you know there may be a financial benefit as well?
Because credit unions are not for profit, they are able to give back way more to their members. This can take the form of lower rates on loans or higher dividends on deposit products, but it can also mean that the credit union is able to invest in creating a better member experience through things like branch enhancements, additional ATMs, or more advanced digital banking options.
5. Credit Unions Are as Safe as Banks
Most people know that bank deposits are insured by the Federal Deposit Insurance Corporation (FDIC) up to a certain amount. What many fail to realize, however, is that deposits made into a credit union account are likely also protected by a different governing body, the National Credit Union Administration (NCUA). A part of the National Credit Union Share Insurance Fund (NCUSIF), the NCUA is a U.S. Government Agency, offering a similar peace of mind to that provided by the FDIC.
FDIC vs NCUA Insurance
The FDIC was formed in 1933 as a result of the Banking Act to help protect Americans trying to recover from the Great Depression. The FDIC insures banks exclusively and offers protection on deposit amounts up to $250,000 with the full faith and credit of the United States government.
In 1970, the National Credit Union Administration was formed, and soon after, the National Credit Union Share Insurance Fund was started. Its function is nearly identical to the FDIC, the main difference being that NCUSIF insurance is only available to credit unions. That means credit union members will enjoy the same federal protection of their deposits up to $250,000.
6. Many Credit Unions Use Cutting-Edge Technology
It is true that big banks generally have more resources to dedicate towards adopting new technologies, but you might be surprised to know that many credit unions are doing the same. Because credit unions are able to redistribute profits back to their member-owners, many have been able to invest in cutting-edge technologies that are transforming their members’ experience.
It is also worth noting that many of today’s leading financial companies are not banks or credit unions at all, but rather financial technology (commonly referred to as “fintech”) companies. These new fintech companies make it easy for banks and credit unions alike to capitalize on new tools and services. Thanks to these fintechs, a financial institution no longer has to build a better experience with its own resources but rather is able to purchase upgraded experiences if it has the capital to do so.
7. Credit Unions Have More Experience than You May Realize
The first credit unions were created in the 1850s by German farmers who pooled their resources to help ease the financial burdens they were all facing. By 1901, credit unions were being chartered in North America.
First Service was founded in 1977 when employees from an industrial supplier called Brown & Root came together to pursue financial freedom for their families. That means that we’ve spent over 40 years learning how to serve our community through the unique challenges it faces. We’re proud to have been a part of Houston for this long and look forward to the next 40 years!
8. Credit Unions Offer Modern Solutions
Credit unions from coast to coast have taken drastic steps to meet the modern needs of their members. Because they are member-owned institutions, credit unions have more flexibility to adapt when challenges arise. After all, votes are being cast by member-owners rather than anonymous shareholders. Credit unions are able to put people before profits in a way that banks cannot, which means that they are able to prioritize the needs of their members.
First Service Is Here for You
If you are looking for a financial institution that allows you to bank like you own the place®, you’ve come to the right place. At First Service, our mission is to provide financial products and services that enhance our members’ lives and that promise starts with you. Join today to find out exactly what it means when we say we are “For You Not Profit.”