How to Join a Credit Union,Joining a credit union requires comparing different offerings, learning about membership qualifications, and funding your account. Unlike banks, which are open to the public, credit unions often have membership criteria, so not everyone can join.
Find out how to determine whether a credit union would be a good fit for you, and how to join one.
What Is a Credit Union?
Credit unions are not-for-profit institutions that provide savings and loan services. Unlike a bank, account holders (members) own the credit union, so a credit union is driven by member interest, not producing a profit.
Credit union checking or savings accounts are often called share accounts to indicate members’ financial share in the institution. Members of many credit unions can use a network of more than 30,000 ATMs throughout the United States and Canada.
Credit unions offer many basic financial tools, including person-to-person payments, online bill pay, mobile apps, and online banking.
How to Join a Credit Union
Depending on the credit union’s criteria, joining could be straightforward or more involved. Here’s the basic process.
Step 1: Research Your Options
Identify what you want from a credit union, whether it is finding one with branches near your home for convenient in-person services or one with online services and competitive rates.
Then, narrow your options. Investopedia’s Best Credit Unions list can provide a good starting point for comparing credit union offerings. For example, if you travel often and want to make in-person transactions, you may benefit by joining a credit union participating in the nationwide CO-OP shared branch network of over 5,300 credit unions.
Step 2: Find Information on Membership Requirements
Credit unions often have requirements for who can become a member, meaning you can join or vote on leadership. Each credit union has different criteria for becoming a member. Review the credit union’s website to find membership information.
Next, confirm whether you’re eligible to join the credit union. The credit union will describe field of membership requirements, which could include criteria such as:
- Occupation: Such as military member, teacher, or employed by or retired from a specific business
- Association: Being in a particular church; professional, civic, or fraternal group; or specific labor union
- Education: Students or alumni of a specific college, university, or school system
- Family: Being related to a current member
- Region: Living, working, or attending school in a specific community or communities
Many credit unions offer an alternate way to join if you do not fit their criteria. For example, a credit union may allow anyone to join if they become a member of a specific nonprofit organization for a small fee. The credit union may pay any one-time membership fee—ranging from $5 to $25—to the nonprofit organization on your behalf, or you may need to pay this fee.
Step 3: Apply for Membership
You’ll often have an option of applying to join a credit union online, by mailed paper application, or in person. Make sure to have your legal name, address, date of birth, Social Security number, and other information on hand.
You’ll typically need to provide:
- Your Social Security Number or Taxpayer Identification Number
- Government-issued ID such as a driver’s license or passport
- Proof of address such as a utility bill or lease agreement
- Method for funding your new account (more on this below)
- Other eligibility documents such as a pay stub or school transcript
Step 4: Make a Deposit
Choose which type of accounts you’d like to open, such as savings, checking, or certificate of deposit (CD), and then make a deposit. Depending on the credit union, membership typically requires a minimum deposit of about $5 to $25 for a savings account, or share account.
A credit union may require you to have a minimum balance in your savings account, such as $10, $50, or $100. You may have a minimum balance requirement to earn a specified savings rate.
Step 5: Read Your Account Disclosures and Agreement
After you’ve joined the credit union, make sure you fully understand the terms. Comparing terms should have been part of shopping for the right fit for a credit union for you, but you’ll want to review the terms again to be sure that you understand all the details.
Fine-print disclosures help you understand your new account and avoid unexpected charges. In particular, review your new account’s:
- Fee schedules
- Overdraft protection policy and opt-out
- Explanation of how dividends or interest-bearing accounts work
Pros and Cons of Joining a Credit Union
- Competitive savings rates
- Low borrowing rates
- Low or no fees
- Membership process
- Limited locations and hours
Pros of Joining a Credit Union Explained
- Competitive savings rates: Credit unions often have better CD rates than banks.
- Low borrowing rates: Credit unions typically have lower interest rates on credit cards, some mortgage products, and car loans.12
- Benefits: Credit unions may offer members discounts and/or cash back on services, car rentals, insurance, and online shopping.
- Low or no fees: Credit unions typically don’t charge maintenance fees and may not require a minimum balance on checking accounts.
Cons of Joining a Credit Union Explained
- Membership process: Joining a credit union can entail a membership process if the credit union’s field of membership is narrow.
- Limited locations and hours: Credit union branches and ATMs likely won’t be as widespread or accessible as with national banking options, so you may need to conduct more business by phone or online. You may also have a hard time finding an international CO-OP ATM.
How to Choose a Credit Union
First, you’ll need to make sure that the credit union you choose will accept you as a member. Then, consider making sure it has some or all of the following benefits:
- Savings protection: Deposit insurance of up to $250,000 for your savings and checking accounts
- ATM access: Access to the CO-OP ATM network and ATM fee rebates
- Fees: No or low monthly fees for services
- Checking accounts: No account minimums and free checks
- Free financial planning: Budgeting, paying off debts, and other assistance with financial wellness
- A mobile app: To check balances and use mobile check deposit
- Tech integration: Methods to easily transfer funds or pay bills
For many potential members, a commitment to community contributions is also important, so you may want to review the credit union’s annual report and history of giving.
What Is a Credit Union Field of Membership?
A credit union’s field of membership defines the types of people who a credit union may enroll as members. Each credit union will have its own defined membership. For example, one credit union may only enroll people living within a specific county as members, while another may enroll people in specific occupations.13
What Is the Difference Between a Privately and Federally Insured Credit Union?
Most credit unions are federally insured. Around 98% of federally insured credit unions have member deposits insured up to $250,000 by the National Credit Union Share Insurance Fund (NCUSIF). However, a small percentage of credit unions privately insure deposits by a company called American Share Insurance (ASI). The credit union should disclose how member deposits are insured, the amount of coverage, and how coverage works.1415
What Is the Interest Rate on a Credit Union Savings Account?
As of March 2023, the average interest rate for a regular savings account on a $2,500 balance was 0.16%—lower than at a bank, which averaged 0.28%. You may want to look into credit union money market savings accounts or credit union certificates of deposit (CDs), which on average pay higher interest than a bank.
The Bottom Line
Joining a credit union can make sense if you want to benefit from a specific credit union’s higher CD interest rates, lower loan rates, and no-fee checking. But joining a specific credit union can be challenging because of the potential for membership requirements.
If you want to join a particular credit union due to great savings rates or another reason, but you don’t meet membership criteria, call to see if there’s another way you can qualify to be a member.