Every federal credit union (FCU) offers its members checking, savings, and certificate accounts free of any monthly maintenance fees. They offer the usual money market savings accounts, but members can open a savings account with only $1,000 and will enjoy better rates than regular savings accounts offer.Custodial savings accounts are a rare financial product among banking institutions, but these financial institutions add this account to their financial product menu. A custodial savings account is typically opened on behalf of children younger than 21 years of age. The account can be opened, though, for a person of any age who would benefit from having a person other than himself or herself administering the account.
Share certificates only available at FCUs pay their members a guaranteed interest rate over a fixed period of time.Generally, eligibility for joining is dependent on a geographic region or work affiliation. Also, members of the immediate family or household of a person noted above are eligible to join. A “household” is defined as persons living under the same roof and operating as a single economic unit.A spouse of a deceased member, as described above, is also eligible for membership, as are employees, volunteers, and retirees of the FCU.What is the Difference between Traditional Banks and Federal Credit Unions?
Those who qualify for membership will be able to take advantage of all that FCUs offer their members. A credit union is a not-for-profit organization that is established to serve its members rather than to optimize corporate profits.Similar to banks, credit unions take deposits and make loans. The difference lies in the fact that they are owned by their members and focus on giving them a secure place to save their money and borrow at very reasonable rates. Credit unions return surplus earnings to their members in the form of dividends. Banks do not.The fees and loan rates at these financial institutions are usually lower, while interest rates earned are higher than those earned at banks.Since FCUs are owned by their members, they operate democratically. Each member has an equal voice in the operation, regardless of the size of his or her accounts.