Banking

Want Flexibility? Try Online Credit Unions

Money management has always been important, but today there seems to be a lot more options than there used to be.

Financial institutions operate both in-person and online.

Many options are only available online, and for people who don’t necessarily stay committed to a single place to live or work.

Taking care of your money mostly online is a great option.

Banks have done a lot with online banking over the years, but more and more credit unions are offering extensive online services.

Benefits of Credit Unions Vs. Banks

When you are choosing where to manage your money, you may ask whether a bank or a credit union is the best choice.

Profit Status

There are a lot of big high-profile banks that make it easy to find an ATM when you need it without having to pay a fee, but there are also some downsides of a traditional bank as well.

For one, banks are out to make a profit. This means they are more likely to charge higher interest on loans, and offer lower interest on savings and other investment accounts than a comparable credit union.

At the bank, your money works for the bank, at a credit union, you are the priority.

This means you can get better interest on loans, including student loans, they offer individualized debt consolidation, they offer resources to get educated about finances, so you get better with your money — rather than profiting from your errors with high fees. 

Credit Unions are non-profit institutions, and they take any money earned and give it back to the members.

People who manage money through a credit union are part of the credit union.

Credit union members also can often qualify for loans, or get better interest than those going through a bank.

How To Choose an Online Credit Union

Credit unions are not meant to be one size fits all, so it is important to put some thought into where you want to keep and manage your money to make sure you choose something that is a good fit.

When you become a credit union member, you become a co-owner of that institution, so it is important to pick something that you believe in.

Credit unions like for their members to have something in common, and some are more strict about your connection that others. Here are some things credit unions look for

The Industry you work in — Such as education, or another trade.

The company you work for — Many larger non-profits have their own credit union for employees

Where you live — Some credit unions are run by a certain city or state, or require that you reside in that state.

Your religion — Many strive to connection people of a similar faith.

Charitable Causes — Many credit unions are committed to advancing certain charities.

Family Connection — If a family member is a member, it is more likely you can be accepted as a member too, even if you don’t meet other requirements.

Look at Your Financial Goals

Before you join an online credit union, you should look at your financial goals.

Do you expect to buy or sell a home in the next few years? Do you need to save money so your child or grandchild can further their education?

Do you want to invest in a new business opportunity? Do you just want to earn a bit of interest with a checking or savings account?

What kind of minimum balance are you able to keep?

Knowing the answers to at least some of these questions can go a long way toward helping you choose the credit union that is best for you.

Be sure to look at plenty of options so you can weigh what works best for you.

If a specific credit union has attractive rates and features available, don’t be afraid to inquire, even if you don’t think it is an obvious fit.

Many credit unions have workarounds, or offer the option of donating to an important cause if they don’t otherwise seem like the obvious choice.

Consider How You Want to Access Your Money

There are some credit unions that may not have all the convenience of large banks, although many do have their own apps with plenty of bells and whistles.

Many offer debit cards, and will reimburse a certain amount of fees.

For some, it can be a benefit to actually work a bit harder to access money, because it may help some be more effective savers.

Best Online Credit Unions

Not sure where to start shopping for a new online credit union? Don’t worry, we can make some recommendations.

Here are some of our picks for the top online credit unions:

  • Connexus – good for high interest checking account
  • Alliant – good for high interest savings account and checking account
  • Golden 1 Credit Union – good for student checking account

Final Word

Just like banks, credit unions are federally insured, so your money is safe. You’ll also be given voting rights in many cases, which helps you steer the direction of the institution.

Overall, credit unions are more personal.

They are known for their neighborly approach. You invest in them and they invest in you.

You might start with just a savings or checking account, and find that they are there for you when you buy a home or start a business.

Even if you have had an account at the same bank for a long time, it is worth your while to cultivate a new relationship with an online credit union.

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