Why Credit Unions?
At MedicareCU, we work exclusively with credit union members across the country delivering Medicare solutions to eligibles looking for peace of mind through their retirement. Our values and those of our partners are aligned as we focus on serving individuals and their communities.
What’s the Difference Between a Bank and a Credit Union?
In many ways, banks and credit unions are similar. Both are financial institutions that receive deposits from individuals and businesses and make loans— both can hold your money and provide a line of credit. But there are a few key differences that are important to understand.
Credit Unions are Member-Owned
Those who utilize the services of a credit union are known as members. Credit union ownership is shared equally among all its individual members. A board of directors is elected by and from the credit union’s membership to run the institution.
Credit Unions Operate on a Not-For-Profit Basis
Simply put, credit unions exist to serve the needs of their members and are always non-profit organizations. Because of this, they are governed differently than banks— but they are not entirely tax-exempt. Credit unions pay state, local, property, and payroll taxes.
Credit Unions Are Community-Oriented
To say “community-oriented” does not mean a low valuation of assets. Credit unions can be very large, supporting as much activity as a bank. However, they are invested in supporting their members as well as their local or regional communities.
Addressing Important Concerns and Delivering Benefits
Due to a member-minded approach, credit unions have some considerable advantages over many banks. Some such advantages include an ability to help drive the institution through voting rights, access to local experts, and a variety of service offerings and benefits. Many of these benefits are financial and include:
- Lower Interest Rates on Loans and Credit According to the 2021 Credit Union National Association (CUNA) report, credit union members, on average, experienced lower loan and credit interest rates nationwide. For example, the interest rate of a 60-month new car loan was nearly 1.5 percent higher (on average) while the interest rate of a rewards credit card was over 4 percent higher (on average) when offered by a banking institution instead of a credit union.
- Higher Interest Rates on Savings According to the same 2021 CUNA report, retirement (IRA) accounts experienced (on average) a 25 percent interest rate with credit unions compared to a 12 percent rate with banking institutions. A regular savings account with a $1000 balance saw (on average) 18 percent interest rates from credit unions while banking institutions delivered at a rate of .05 percent (on average).
- Lower Fees Because Credit Unions don’t operate for profit, there are a number of fees you will likely avoid such as those incurred when opening an account, wiring funds, advancing credit, and more.