What Is a Credit Union?
A credit union is a cooperative, non-profit association, incorporated in accordance with the provisions of the Kentucky Credit Union Law or the Federal Credit Union Act. Its purpose is to create a source of credit for its members at a fair and reasonable rate of interest and, at the same time, encourage habits of thrift and provide the opportunity for people to mutually benefit from the use and control of their savings. Based on the principles of brotherhood, economic democracy and individual self-help, credit unions serve people who are united by a common bond of association, employment, residence or membership in the same church or organization.
Creating financial peace of mind, satisfaction and economic stability for its members is the mission of every credit union. Credit unions are greatly influenced by the realization that a good financial life is possible only as the result of systematic savings and the prudent use of your resources. By encouraging the intelligent use of credit, through education and low-cost loans to its member-owners, a credit union is able to increase its members’ moral responsibility and enhance their individual dignity. The convenience of consumer credit through a credit union can provide additional purchasing power that may contribute significantly to an improved standard of living if they are used with understanding and foresight.
Advantages of Being a Credit Union Member
Credit unions want to help you meet your financial goals. Savings plans available through credit unions usually pay dividends or interest that is comparable to or better than interest paid on savings accounts offered at other financial institutions. Many credit union members find that saving through payroll deduction becomes an easy way to systematically build their savings program.
Only members may borrow from the credit union. Credit unions traditionally have been the best place to get a loan. Interest rates are usually lower than those offered by other lenders. Since credit unions consider one's character as well as collateral, it is often easier to get a get a credit union loan. Most Kentucky credit unions also offer the convenience of payroll deduction for ease in making the payments.
Other Financial Services
In a credit union you'll find many other consumer services to help you secure a financially sound future. These services may include low or no cost checking accounts, certificate savings accounts, ATM (money machine) cards, credit cards, as well as sound financial advise. Credit unions are non-profit. Earnings are distributed to members either in the form of better rates on savings and loans, or earnings are invested in new or improved services for members.
Ownership of a Credit Union
Once you deposit money in the credit union, you become a member-owner. Eligible members can then vote for the credit union's Board of Directors on a one member, one vote basis. Officers and directors are chosen from the membership and serve on a voluntary basis.
Once you join you not only become a member of the credit union but part of a national financial system. The credit union does not stand alone but is joined by more than 7,000 other credit unions throughout the United States and is supported by state and national credit union organizations such as the Kentucky Credit Union League and the Credit Union National Association (CUNA)
Insurance of Accounts
Deposits in all Kentucky credit unions are insured up to $250,000. by the National Credit Union Share Insurance Fund. This fund is backed by the good faith of the United States and is administered by the National Credit Union Administration, an instrumentality of the federal government.
Credit Unions for Employers
Membership in a Credit Union is one of the most important "fringe benefits" employers can offer their employees. Although employees often think of the Credit Union as a benefit from their employer, the Credit Union is self-supporting and operates independently. Credit Union consumer services usually complement an employer's benefits package.
Payroll deduction is a favorite among Credit Union members. It makes it easy to save or pay loans automatically.. For the employer, it is simple and economical. Most Credit Unions even accept direct deposit, which can save money for the employer payroll programs.
All deposits in Kentucky Credit Unions are federally insured up to $250,000 by the National Credit Union Share Insurance Fund, a fund administered by the National Credit Union Administration, an agency of the federal government.
Credit Union membership benefits employees by:
- Encouraging regular saving,
- Educating them about good financial habits,
- Providing rates and terms better than most other financial institutions,
- Accommodating smaller loans than other financial institutions
- Giving them an excellent fringe benefit.
Credit Unions help your employees take charge of their own financial affairs and reach financial stability, thereby becoming more productive employees for you. Credit Unions serve every type of business, industry and profession. Your business can offer the Credit Union benefit, too.
If you wish to learn more about how to offer this valuable benefit to your employees simply contact the Kentucky Credit Union League at (800) 333 5285, e-mail firstname.lastname@example.org