If you are serious about making the most of your money, you should be doing your financial shopping at credit unions.
A recent survey by depositaccounts.com confirmed once again that credit unions-especially large ones-consistently offer the best interest rates on savings accounts and certificates of deposit.
And that’s just the start. If you are shopping for a car loan, you are nuts not to check out credit unions. According to a national survey, the average interest rate for a 3-year loan for a used car in late 2015 was 2.7% at credit unions, compared to a bank average rate of more than 5%. (Yes, those great financing offers in ads from car dealers look even better. Yet they are typically offered to only a very small percentage of buyers who have fantastic credit scores.) On a new car loan the credit union average rate was about 2 percentage points less than the bank loan rate.
If you’re thinking about a home equity line of credit (HELOC) or loan, again credit unions offer the better terms. The one area that was a tossup: home loans to purchase a home.
Credit Union Tips
∙ Become a member. Credit unions only offer accounts to members, often for a one-time fee of less than $20 or so. Sometimes membership is restricted to a certain group, such as employees of a company, or a local organization. But quite often credit unions will offer membership to local residents. And there are a few credit unions that accept members nationwide, often just for a one-time donation or fee. You can use this credit union finder to look for local credit unions. And be sure to do a quick web search for “credit unions nationwide” or “credit unions anyone can join” to find credit unions that accept members from far and wide.
∙ Check in with your network of friends and family. Many credit unions extend membership to relatives, or sometimes even friends, of current members.
∙ Make sure the credit union is federally insured. Just like there is FDIC insurance for banks, there is a program for credit unions as well. Confirm that any credit union you are thinking of joining is covered by the National Credit Union Share Insurance Fund (NCUSIF). That’s a federal program that guarantees that even if the credit union runs into financial trouble (not likely) you will get back every penny of your money on deposit, up to a general limit of $250,000.