A credit union is a kind of financial institution that provides its clients with traditional banking services. They range in different sizes from small volunteer organizations to huge entities. They also have thousands of participants all over the country.
Credit unions can easily be formed by large organizations, or corporations for their staff members and then open them up to the members of the public. This is how most of the large credit unions started, through a small group of people in a company.
They are however owned and operated by the members. In this regard, credit unions are non-profit organizations, unlike banks.[toc]
What is the difference between a bank and a credit union?
The main difference between these two is that banks are for profit-making, while credit unions, as I have mentioned above, are non-profit organizations.
Credit unions have been known to have better customer service compared to banks, which is due to their non-profit status, and in addition, they charge less for their services.
Advantages of Credit Unions
These institutions are non-profits, and therefore, they are owned solely by the customers, which means that their services are mostly customer-oriented. This is the reason why you will always experience the best customer care in their offices.
Better interest rates. This is one of the main reasons why most people opt to use a credit union rather than a bank. Their loan interest rates cannot be compared to what you shall find in a bank, and they enable you to earn more from your deposits compared to a bank.
As a nonprofit, they pass most of their surplus income to their members, by making the interest to be earned on deposits higher.
Low fees – They will pass savings to their members by charging less for operating your account, such as withdrawals.
Working as a community – Since credit unions and owned and operated by the members, there is a strong sense of community and the fact that most of the services are geared towards helping everyone in the neighboring community.
Limitations of credit unions
Membership: Unlike banks, where you can walk in, open an account, and begin operations, credit unions require you to become a member first. You must also qualify for membership since they have rules and regulations that must be followed in order to achieve this.
There may also be a membership fee of about $5-$25 and a minimum operating deposit in their accounts. When you need to take a loan, in most cases, they will give you a specific amount based on your savings, which is not always a great thing.
Branch locations – Unlike banks, credit unions have limited branch locations. You may not find one in the nearest block, and their ATM's are also scarce as well. Although the small and community-based quality of a credit union is what attracts most people, the inability to find a branch near you can be inconveniencing.
Lack of insurance – Banks are insured by the FDIC. Credit Unions have their own governing body known as the National Credit Union Administration or the NCAU. It is, however, unfortunate that not all of them are insured, which is a risk factor.
Fewer services compared to banks – if you compare what a bank has to offer to what is available in a credit union, there are definitely big differences. Credit unions have come a long way, and they try their best to offer similar services to banks, but there is so much more to be done in order to have them on the same level.
In addition, they are not as tech-savvy as you would want them to be, which in most cases contributes to numerous errors when you require to use their services.
A review of the Wright-Patt Credit Union
Now that you understand what a credit union is, I will review the Wright-Patt credit union so that you can have more insight into its operations, and whether or not it is the right option for you if you are interested in saving.
Wright-Patt is a credit union based in Beavercreek, OH, and it is an insured credit union that was started in 1932. They currently hold assets worth $4.04 billion and have an estimated 741 employees.
Their loans and leases are worth more than $2.88 billion, and their membership is currently at 354,443. These members have more than $3.44 billion shares with the company.
They have a simple and down to earth mission statement – “we help people through life,” and this is what makes people love them. In the year 2017, Wright-Patt Credit Union was named the best bank in Ohio, and if the statistics are anything to go by, they are only getting stronger.
Their services extend to everyone, and not just the civilians and military officers of the Wright-Patterson Air Force Base.
Wright-Patt Credit Union Fees and Rates At-a-Glance
|Checking with Dividends||Interest rate:|
0.04% APY for any balance that is between: $0.01 to $24,999.99;And, 0.08% for balances of $25,000 and higher
|N/A||You Must be a member of Wright-Patt Credit Union to apply||Variable-rate account; dividend and APY rates might change|
|True Saver Savings||Interest Rate: 3.00% on all balances between $0.01 – $500;|
And 0.08% for all balances above $500.
|N/A||You Must be a member of Wright-Patt Credit Union to apply||Variable rate account; dividend and APY rates might change|
|Personal Loan||Interest rate is as low as 7.99%||0 to 60 months||You Must be a member of Wright-Patt Credit Union to apply||Rates depend on credit history, and the loan term|
|Auto Loan||The Interest rate range from 3.14% -4.64%||0 to 84 months||You Must be a member of Wright-Patt Credit Union to apply||For 64 months, the minimum is $8,000 minimum|
for terms greater than 64 months, a minimum of $18,000
|Mortgage||Interest rates range from 4.471% – 4.858%||5/5 ARM to 30-year fixed||You Must be a member of Wright-Patt Credit Union to apply||The Rate is affected by the amount of down payment, the equity and whether you are purchasing or refinancing your loans.|
|Certificates of Deposit (Share Certificates)||Interest rates range from 1.48% – 2.87%||6 to 72 months||You Must be a member of Wright-Patt Credit Union to apply||Accounts are variable and dividend rates might change|
|Credit Card||Interest rates range from 7.75% – 17.99%||N/A||You Must be a member of Wright-Patt Credit Union to apply||APR varies based on Prime Rate|
Here is how you can become a member
Wright-Patt Credit Union has a wide range of products for members to enjoy, such as a Wright-Patt student loan or even a mortgage, but you must become a member first for this to happen. Here are some of their requirements to become a member;
- You must be living, working, worshipping, or attending school within a qualifying area.
- Your current employer must be within the qualifying list.
- You must have some relatives who are already members or who qualify to become members.
- You must hold membership within some qualifying associations.
Once you have reviewed the qualification requirements, and identified that you do in fact qualify to become a member, the next step for you is to open a TrueSaver account, because this is the account used by all members to hold their shares.
Download the membership form and fill it out. Ensure you have the following information at hand;
- Your Social Security Number.
- Your driving license or any other state-issued ID.
- Your financial information so as to deposit some funds into the account once opened.
Products and services available to Wright-Patt members;
This credit union has a wide variety of products and services which include;
Savings and checking accounts
Their checking account is what they call ‘all fair.' It has no surprises, which means that you do not have to pay any hidden charges, and in addition, there is an unlimited check writing, which is also free online plus, you shall also get to enjoy mobile banking among other benefits.
With this account, you shall be able to take care of your immediate and most pressing bills stress-free, and when you are a member, most of these services are absolutely free.
Mortgages and construction loans
If you want to buy a house, it will be very easy for you to qualify for a mortgage with minimal requirements. Whether it is your first home, or you want to buy another one, Wright-Patt credit union makes this very easy for its members. You must, however, visit their mortgage center, in order to finding out everything you need to about this product.
Their home equity loans are valuable resources for anyone trying to determine whether their home equity is the best option for keeping more of your money in your pocket. This means that, if you want to borrow against an already existing mortgage, they will guide you on that and offer as much help as they possibly can.
The personal loans from this credit union come with low-interest rates and easy terms. What you will love most about them is that they do not require any collateral. This is great news. Mostly, they will ask to see your paycheck, a letter from your employer and your credit report to determine your creditworthiness.
Line of credit
This is a great product, especially for business people. If you have some unexpected expenses and are trying to keep your business afloat, the Union will give you a great line of credit to help you get some much-needed money in your pocket so you can settle the most pressing bills.
You are actually able to live the kind of life you ever wanted with a line of credit that you can use whenever you need it.
Stretch pay loan
This loan product is not common with banks or other credit unions. A stretch pay loan gives you some money in your pocket when you are in-between paychecks. It is a short term cash advance that you can pay when your paycheck comes in.
It is a smart choice, compared to the other high-interest loans available with the company. You must, however, have your paycheck pass through one of their accounts in order for this to work.
Employer retirement plans
This is a great employee tool that helps with recruitment and retention. If you are an employer and you want to help your employees and help prepare them for the future, then, having a retirement plan for them is the best thing.
It can be quite taxing, however, to have this plan in place, and what Wright-Patt Credit Union does is to do the job for you. They have many investment professionals who are available through their broker deals.
These professionals will study your organization, and understand your needs; then they will create and customize a retirement plan that is fit for your organization. They will design for you a low-cost deal that you can be able to manage on your own.
When it comes to the decision between a bank and a credit union, it really depends on what you want, but most people have currently been finding it easier to deal with a credit union as compared to the complicated procedures in a bank.
Granted, you cannot find some services in the credit union, but, when it comes to loans processing, loan requirements and access to other important products, most people opt to use a credit union rather than a bank.
I would advise a student to become a member of a credit union as it is much more beneficial to you, especially during your school years, as they almost always have a great saving plan, but if you are an employed professional, then, a bank would be most ideal for you.