When you belong to a credit union you’re a member of a not-for-profit financial institution. That means any profits made go back into the credit union in the form of better rates and lower fees for the members, who own and control the credit union.
Credit unions offer many – and, in some cases, all – of the same products and services offered by for-profit banks including checking, savings, loans and online banking. Credit unions even have their own nationwide ATM network.
1. Open Your New Account*
In most cases, you should be able to open a checking account with an initial deposit of $5 to $25 (each credit union can determine how much one share will be). By purchasing that one share, you'll become a member and co-owner at the same time.
2. Order New Checks and an ATM/Debit Card
These typically arrive within 1 to 2 weeks. You should also consider applying for a credit card from your new local bank or credit union at the same time.
3. Ask Your Employer to Reroute Your Direct Deposit
When you open your new account, ask the bank or credit union for a direct deposit authorization form that includes your new account information. Give this form to your employer and anyone else who makes direct deposits to your account. It may take one or more pay cycles for the change to be made, so keep your old checking account open and watch for the switch.
4. Contact Companies that Direct-Debit Your Account
Using your last bank statement, make a list of any businesses that you've authorized to directly debit your account. Ask your new bank or credit union for an automatic payments authorization form that includes your new account information. Send this to the businesses on your list.
5. Set-up Online Bill Paying for Your New Account
If you like to pay bills online, set up bill payment information for your new account. Also, stop automatic, recurring payments you have established through your old account.
6. Close Your Old Account
Once you have started receiving direct deposit into your new account and are sure that there are no outstanding checks or automatic debits that need to clear, close your account. Warning: do not just withdraw the last dollar and assume the account will fade away on its own. Your bank may start charging you fees for having an empty or inactive checking account. Instead, follow the bank's procedure for closing out the account.
7. Enjoy Your New Local Banking Relationship!**
Once you have settled into your new financial relationship consider switching all of your accounts to the credit union.
* Revised source: National Credit Union Administration (NCUA).
**Revised source: Credit Union National Association (CUNA).
Find the Credit Union That’s Right for You.
Credit union eligibility is based on something called its “field of membership.” Where you live, work, worship or go to school determines what credit union you can join. This includes national credit unions, federal credit unions and might even be the credit union around the corner. Be sure to ask the credit union for their switch kit to streamline the process.
We’ve covered what a credit union is, why you should choose a credit union and how to join a credit union. So what are you waiting for? To switch your financial services to a credit union follow these 7 steps.
Better Rates, Lower Fees.
*Credit Union National Association's Economics and Statistics Department
Putting Members First.
Don’t forget that each and every credit union member is an owner. How’s that for putting you first? And with more than 93 million credit union members nationwide, you’ll be in good company.
All the Products and Services You Want.
And there can be easy access to your money no matter where you are. With services such as the CO-OP ATM Network, you can use nearly 30,000 ATMs nationwide. Plus, you save money since they’re surcharge-free!
Credit unions are also able to serve their members wherever they are thanks to something called shared branching. That means credit unions share thousands of facilities across the country, letting you make important banking transactions wherever you may roam.
Credit Unions Are Not-for-Profit.
Which is what members expect and deserve – they are the owners. When you become a credit union member, you know that your hard-earned money is working for you, not to make profits for someone else.
On average, they have better rates and lower fees.
They earn higher customer satisfaction ratings.
As not-for-profits, they have lower costs and pass the savings along to members.
Every member is an owner. There's no question whose interests will be served.
They give back to their communities with financial education and counseling services.