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Credit unions are organisations which you can join to help you manage your money. They are not banks in the traditional sense of the word. They can range from having just a few members to having hundreds of thousands. They are not profit making organisations. They exist for the benefit of their members. The people who have accounts in them are entitled to vote regarding how the credit union is run. Credit unions started in Germany over one hundred and fifty years ago.
Joining A Credit Union
You can usually join if you have a common bond with other people. This could be a bond established by living in a certain area, by belonging to a trade union that is to do with your work or by belonging to a housing association.
Saving With A Credit Union
Credit unions usually offer the facility to open a savings account. In fact, you must usually save with them for a defined period before you will be allowed to take out a loan with them. This might be for three months for example. After this time you will be allowed to apply for a loan. You can save as much as you can afford to. It might just be a small amount but whatever it is you must save regularly. At the end of the year they will declare a dividend. You will be paid interest from this dividend on your savings. Because the credit union does not make a profit and has no shareholders to pay except for the members, the interest rate can be quite good compared to commercial financial institutions.
Getting a Loan from a Credit Union
The amount you can borrow will depend on how much you need and if you have previously saved regularly with them. The longer you are a member then the more you are usually allowed to borrow. Because no profit is made by the union you can get loans at favourable rates compared to most banks.
What About Insurance?
If you borrow money from them you will normally have loan protection insurance provided. This pays off the loan if you die. If you save with them you will get life insurance which means if you die your nominated beneficiary will receive up to twice the value of your shares invested.
In conclusion, credit unions offer a safe and secure home for your savings and a good place to borrow money from. Because they exist for the benefit of their members the rates they offer are usually better than those available from the high street banks. Most people qualify to join one, either through where they live or through the work they do.
Article Source: http://EzineArticles.com/3546302
Joining A Credit Union
You can usually join if you have a common bond with other people. This could be a bond established by living in a certain area, by belonging to a trade union that is to do with your work or by belonging to a housing association.
Saving With A Credit Union
Credit unions usually offer the facility to open a savings account. In fact, you must usually save with them for a defined period before you will be allowed to take out a loan with them. This might be for three months for example. After this time you will be allowed to apply for a loan. You can save as much as you can afford to. It might just be a small amount but whatever it is you must save regularly. At the end of the year they will declare a dividend. You will be paid interest from this dividend on your savings. Because the credit union does not make a profit and has no shareholders to pay except for the members, the interest rate can be quite good compared to commercial financial institutions.
Getting a Loan from a Credit Union
The amount you can borrow will depend on how much you need and if you have previously saved regularly with them. The longer you are a member then the more you are usually allowed to borrow. Because no profit is made by the union you can get loans at favourable rates compared to most banks.
What About Insurance?
If you borrow money from them you will normally have loan protection insurance provided. This pays off the loan if you die. If you save with them you will get life insurance which means if you die your nominated beneficiary will receive up to twice the value of your shares invested.
In conclusion, credit unions offer a safe and secure home for your savings and a good place to borrow money from. Because they exist for the benefit of their members the rates they offer are usually better than those available from the high street banks. Most people qualify to join one, either through where they live or through the work they do.
Article Source: http://EzineArticles.com/3546302