Credit Unions Lead the Way

Whether you’re fresh out of school and ready to open your first account, or you’re planning for retirement and want to get the best bang for your buck, choosing a financial partner is never easy. Most people opt for the traditional route, choosing whichever of the major banks is closest to their home.

But what if I told you that there was one financial institution model that has proven itself to be the best time and time again? Despite the popularity of banks, credit unions have maintained their own level of popularity in the face of economic crises.

How have credit unions remained at the forefront of a highly competitive industry? Why do people continue to choose credit unions over banks and other financial options? What is it about credit unions that makes them so special?

Let’s take a peek under the hood of credit unions, analyzing their organizational structure, their perks, and their impact on their local communities, to see precisely what keeps these organizations ticking.

Member-Owned, Member-Run

At their core, credit unions are financial cooperatives. Owned and operated by the members themselves, they are governed by boards of directors that are elected democratically from the pool of members.

What this means is that when you become a member of a credit union, you are entitled to a say in how that credit union may operate in the future. Becoming a member means becoming an owner, and owner-members are encouraged to get involved and exercise their vote.

Not all financial institutions operate in this way, of course. Banks’ boards of directors are driven by the need to increase returns for external shareholders and investors.

For credit unions, the lack of outside stakeholders is key. This allows credit unions to focus their attention on members. Instead of profits being funneled out and into the pockets of shareholders, any gains made at credit unions are reinvested in the credit union itself. Credit unions focus on utilizing profits to address members’ needs, creating a financial ecosystem in which one member’s success benefits other members of the credit union.

As well as this catalyst for common understanding and shared goals, some other benefits come with being a member of a credit union. There are, of course, financial benefits to touch on, but first, we need to understand how credit unions are structured and the role they play within our local communities.

Not Driven by Profits

People are often taken by surprise when they learn that credit unions are not-for-profit organizations. If you’ve only ever conducted your finances at a bank, this will, indeed, shock you.

This structure lets credit unions do what they do best: pump any gains back in the direction of their owner-members. Whether it be through dividends, lower rates on loans, or higher yields on savings products, credit unions direct any profits earned – after operating costs are paid – right back at their members.

The divergence from generating shareholder profits at all costs is one reason more and more people are choosing credit unions.

This approach underscores a primary objective that lies at the heart of credit unions: providing the best possible service to members. This way of doing business highlights the firm focus on community within credit unions.

What this means is that, at its essence, the primary goal of a credit union is to provide the best service possible to its members. This method of conducting business perfectly encapsulates the community-focused nature of credit unions.

Growing Alongside the Community

Virtually all credit unions were – and continue to be – set up to serve a particular community or specific group of people. These groups can be grouped and identified geographically, and they can also consist of members of a particular place of worship or former and current members of an organization.

The narrow focus on their local communities means credit unions can tailor their services to the need of community members. For example, if one area has a large number of young adults in need of financial assistance, that community’s credit union would likely introduce more specialized accounts and offers for young adults.

In the same way, if a credit union is set up in a lower-income area with little to no history of financial education to offer, that area’s credit union may offer financial management programs, or even sponsor local events on the topic to help promote financial literacy in their local community.

The Numbers Don’t Lie

Now that we’ve spoken about the intangible benefits of credit unions, let’s talk about the bottom line. Will becoming a member of a credit union help you save money? The short answer is yes.

We’ve already seen how any profits gained are directed back toward members through various offers. Lower rates, higher interest rates, and the lingering possibility of potential dividends are all real financial benefits offered by credit unions.

Credit unions can offer more flexibility to members, and they pride themselves on working with individuals regardless of their financial past.

Switching to Quincy Credit Union

Credit unions are positioned to thrive in the coming years. On the frontlines of the financial industry, credit unions offer services every bit as comprehensive as their competition, but provide incomparable customer service.

When you’re ready to make the switch to a credit union, make sure you choose Quincy Credit Union, Massachusetts’ premier financial institution.