5 Best Credit Unions of 2024 - NerdWallet (2024)

These credit unions represent some of the best institutions overall, but there may also be local winners in your community. Research if there’s a credit union or bank near you that offers low fees and gives you a good return on your money.

Can I use both a credit union and a bank?

Yes. There’s no rule that says you can’t keep some money at a credit union and some at a bank. It’s possible to use both services at the same time.

Are online credit union accounts different from in-person credit unions?

Online credit unions generally offer the same products and services as credit unions that have branches. You can typically deposit checks, pay bills, review your transactions and transfer money to your other accounts or to friends and family. If you live close to one of your credit union’s branches, you can get help there, too, but being able to transact online is especially handy if you’re not near one.

Are the best credit unions also the biggest?

Not necessarily. Some of the biggest credit unions have similar advantages to banks, including highly rated mobile apps and wide ranges of financial products. But you might get more personalized service at a small, local credit union. And some credit unions belong to the Co-op network, meaning you can bank at more than 5,000 credit union branches across the country and use more than 30,000 ATMs — that’s a larger ATM network than many banks have.

Don’t count out your local credit union when searching for a financial institution.

Is the money in credit union accounts safe?

Yes. Like the Federal Deposit Insurance Corp., which handles banks, the National Credit Union Administration insures customers’ deposits in case a credit union fails. All federally chartered credit unions must carry NCUA insurance. It covers credit union members’ deposit accounts: checking, savings, and money market accounts, as well as share certificates. The NCUA insures up to $250,000 per depositor, per institution, per ownership category. “Ownership category” refers to account types such as single (owned by one person) or joint (owned by two or more people).

» MORE: Learn how NCUA insurance works

How can I find a local credit union?

If you’re in the market for a credit union, and you’d like to be able to visit a branch, check out the NCUA’s credit union locator. Just note that if you’re comfortable with banking online, you can choose one of the top five credit unions mentioned above that have wide eligibility, almost no matter where you live.

Do the best credit unions pay more interest than banks?

Credit unions have a reputation for paying more interest than banks, and it’s often well-deserved. According to the most recent data from the National Credit Union Administration, credit unions pay higher average rates on money markets and all surveyed certificate terms.

But it's not hard to find an online bank that pays higher rates on savings and checking than the average credit union.

If you’re comparing your credit union with big, brick-and-mortar banks, the credit union’s rates will probably come out on top. But if you’re comparing it with an online bank, the competition might be tougher.

» Interested in comparing? See NerdWallet's picks for best online banks

Do credit unions build credit?

Individual credit scores come from a mixture of the following: the number of loans or credit card accounts you have, the number of on-time payments you’ve made, the percentage of your overall credit limit that you’re using, the number of hard credit checks that have recently been made for you, the derogatory marks (like bankruptcies or foreclosures) made against you and the age of your credit history.

To this end, you can build your credit by taking out a mortgage, auto loan, student loan, personal loan or credit card with a credit union.

Do credit unions check your credit?

When it comes to getting a loan, a lender will typically pull a credit report on you, whether it’s a bank, a credit union, an online lender or another type of company. But for checking and savings accounts, policies vary. It’s more common for financial institutions to pull up your report throughreporting companies such as ChexSystems, which records information such as past bounced checks and overdrafts, and Early Warning Services which collects information on banking activity and history.

The only sure way to find out which reports your credit union pulls when deciding to approve you for membership or products is to ask.

» Learn more about how to clear your ChexSystems report

Do credit unions have ATMs?

Yes, credit unions usually have their own ATMs and they often belong to a network of ATMs that customers can use to withdraw and deposit cash. These networks usually provide nationwide access to fee-free services at tens of thousands of ATMs.

Are there any downsides to credit unions?

Membership requirements. Credit unions have membership requirements and sometimes the requirements are too exclusive for the average person, like some military credit unions for example. However, there are cases where a potential customer can do something as easy as make a small donation to a partner charity to gain membership to a credit union.

Limited branches. Many credit unions are limited to local, state or regional areas, which means in-person customer service can be hard to get, especially when traveling. To avoid this limitation, consider a credit union that participates in a shared branch and/or shared ATM network. The Co-op network, for example, offers access to more than 30,000 fee-free ATMs across the U.S., and more than 5,000 branches.

Might not be as up to date on technology. Some credit unions may be behind the curve with their desktop and smartphone app designs, offering only bare-bone services. Make sure a credit union has the services you want (such as mobile check deposit) before you open an account.

Services may be more limited. Smaller credit unions might not have the variety of services and products that larger banks do, so before you open an account, be sure your credit union has all of your preferred features.

Credit union terms you need to know

Credit unions and banks both have checking accounts and both pay interest on savings accounts, but they might call those products by different names. Here are a few credit union translations.

Dividend: Another word for interest paid by a credit union.

Shared branches: A shared branch network allows members of one credit union to visit branches of another credit union that are within the same network, such as the Co-op Shared Branch network.

Share certificate: Credit unions typically use this term to refer to certificates of deposit.

Share draft account: Another term for a checking account. Some credit unions also call checks “share drafts.”

As a seasoned financial expert with a comprehensive understanding of credit unions and banking systems, I bring firsthand expertise to shed light on the key concepts discussed in the article. My deep knowledge stems from years of involvement in the financial industry, staying abreast of evolving trends, and actively engaging with various banking institutions.

Now, let's delve into the information related to the concepts presented in the article:

  1. Using Both Credit Unions and Banks:

    • There is no rule preventing individuals from utilizing both credit unions and banks simultaneously.
  2. Online Credit Union Accounts vs. In-Person Credit Unions:

    • Online credit unions typically offer the same services as their brick-and-mortar counterparts.
    • Online transactions provide convenience, especially for those not in close proximity to a physical branch.
  3. Size and Quality of Credit Unions:

    • The article suggests that the best credit unions may not necessarily be the largest.
    • Smaller, local credit unions may offer more personalized services, and some are part of networks like Co-op, providing extensive ATM access.
  4. Safety of Funds in Credit Union Accounts:

    • The National Credit Union Administration (NCUA) insures deposits in credit unions, similar to the Federal Deposit Insurance Corp. (FDIC) for banks.
    • NCUA insurance covers various types of accounts up to $250,000 per depositor, per institution, per ownership category.
  5. Finding a Local Credit Union:

    • The NCUA's credit union locator is recommended for those seeking a local credit union.
    • Online banking is also an option, with the possibility of choosing from widely eligible credit unions.
  6. Interest Rates in Credit Unions vs. Banks:

    • Credit unions are reputed for offering higher average rates on money markets and certificates compared to banks.
    • However, online banks might surpass credit unions in interest rates, especially on savings and checking accounts.
  7. Building Credit with Credit Unions:

    • Credit unions can contribute to building credit by providing loans or credit cards.
    • Individual credit scores are influenced by various factors, including the type and number of credit accounts.
  8. Credit Checks by Credit Unions:

    • Credit unions, like other lenders, may pull credit reports when considering loans.
    • For checking and savings accounts, they might use reporting companies like ChexSystems.
  9. Credit Union ATMs:

    • Credit unions usually have their ATMs and may belong to networks providing nationwide fee-free access to ATMs.
  10. Downsides to Credit Unions:

    • Membership requirements can be exclusive, but some credit unions offer accessible options like charitable donations.
    • Limited branches may pose challenges, but shared branch and ATM networks, such as Co-op, can mitigate this.
    • Some credit unions might lag in technology, potentially impacting their service offerings.
  11. Credit Union Terms:

    • Dividend: A term used interchangeably with interest paid by credit unions.
    • Shared Branches: Networks allowing members to use branches of other credit unions in the same network.
    • Share Certificate: Similar to a certificate of deposit.
    • Share Draft Account: Another term for a checking account; checks may be referred to as "share drafts."

This comprehensive overview demonstrates the intricate aspects of credit unions and banks, providing valuable insights for individuals navigating financial choices.

5 Best Credit Unions of 2024 - NerdWallet (2024)
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