Credit unions are nonprofit money organizations formed and managed by members through pooling financial resources. The cooperatives began in Britain in the 1964s, spreading across England, Wales, and later Scotland before proceeding to the rest of the world.
Credit unions play an essential role in the financial industry by offering affordable and consistent services to their members. Some benefits of joining a credit union are lower interest rates, better customer experience, and affordable fees, among other perks. When looking for a credit union to join, research it comprehensively to evaluate its reputation before making it your financial home.
They offer financial services close to those of banks but with more favourable terms to members, making them one of the most popular financial cooperatives in the 21st century. Let’s explore the roles and responsibilities of credit unions to help you evaluate your financial decisions.
1. Provide Savings Accounts
In a world full of economic uncertainties, you can only salvage yourself and your close ones by securing a great financial future for them. Saving is the most practical way of preparing for that uncertain future, as it keeps you ready for economic fluctuations such as inflation.
Every Ontario credit union provides a savings account for its members and encourages them to save by charging favourable interest. Some standard savings accounts credit unions offer include personal, student, and savings accounts for other professionals such as farmers.
2. Offer Loans to Members
Credit unions’ second most prominent role is to provide loans to their esteemed members at more friendly interest rates. Consumers are usually faced with financial constraints occasionally due to the uncertain nature of the economy.
The good thing is that credit unions can always provide them with loans during such times to finance their needs and repay later in meaningful instalments and lower interest rates. Some examples of loans offered by credit unions include home loans, personal loans, visa credit cards, vehicle and motorcycle loans, and Home Equity Lines of Credit (HELOC).
3. Checking and Credit Cards Services
In the 21st century, nearly every business prefers using a card for payment, among other purposes. For that reason, credit unions saw the need to provide all these methods of card payments to be used internationally and locally via ATMs and other partnered networks.
The good thing with credit, debit, and ATM cards is that they are directly linked to one’s account, making it easier to monitor their transactions and practice financial discipline. Another advantage of these cards is that credit unions offer rewards, most popularly through redeemable points, to their active customers.
4. Provision of Insurance Services
Another role of credit unions is to provide insurance services to their members. For instance, if an active member dies, their beneficiary will receive the benefits in the deceased member’s accounts and any other standing amount from the insurance.
Some also provide a disability waiver to members who become completely disabled before age sixty, allowing the insurance to repay their outstanding loans. Members can also insure their personal properties, such as motor vehicles, with their credit union at reduced premium rates.
5. Money Transfer Services
Consumers across the globe send millions of money to businesses, families, and friends locally and internationally thanks to the money transfer services provided by credit unions. While some stipulated fees and other charges are directly connected with these services, they are probably one of the most helpful innovations that have saved people from waiting long to receive money.
Before embracing a particular money transfer service, you should first study and understand how it operates and any applicable costs and charges to avoid making financial mistakes.
6. Online and Mobile Banking Services
Gone are the days when consumers could only physically visit credit unions to check their balances, make a transaction, or inquire about various services. Thanks to advancing technology, they can effectively manage their financial needs conveniently.
When choosing which credit union to embrace, you should examine their online and mobile banking services before settling for one. Additionally, it would help if you remained very confidential and vigilant with your mobile and online banking platforms due to the rising number of scammers worldwide.
7. Digital Wallets and Payments
The final role of credit unions is to provide digital wallets and payment services to their members. A digital wallet is an electronic version of the physical one, providing online payments and other services. Consumers can use digital wallets to shop from stores online or through various digital software applications.
Previously not many retailers and wholesalers accepted digital wallet services, but as years progressed, they have become the most popular payment method, among other purposes. Additionally, digital wallets are directly linked to one’s credit union account.
How Can I Join a Credit Union?
To become a credit union member, you must physically visit your preferred cooperative to confirm the required details. However, most credit unions require your official name, address, phone number, bank details, tax information, and next of kin as the credit details to join the cooperative.
Thanks to technology, many credit unions offer online application services for their customers but require them to appear physically on the premises for details verification and photo-taking.