3 Unique Benefits of Credit Unions
Imagine a financial institution that truly puts your needs first. Credit unions are unique in that they operate as cooperatives, providing distinct benefits to their members and support to their communities. It’s credit unions’ dedication to serving the best interests of their members that sets them apart. Let’s explore what makes cooperatives, particularly credit unions, so special.
What is a Cooperative?
First, let’s define cooperatives. They are organizations owned and operated by their members for their mutual benefit. Cooperatives are guided by seven key principles, including democratic member control, member economic participation, and a commitment to community. These principles ensure that cooperatives prioritize the needs and interests of their members above all else. As a credit union member, you can expect all of this and more.
#1 – Uplifting your voice.
Credit unions are a type of financial cooperative specifically designed to provide banking services. Uniquely positioned, the credit union model is centered around building up the financial well-being of its members.
Member Ownership: At a credit union, you’re not just a customer—you’re a member and part-owner. This means that every member has a stake in the credit union and a voice in how it’s run. It also means you pool your resources with all the other members to provide services and meet everyone’s financial needs. This ownership structure allows credit unions to operate with the primary goal of benefiting their members, ensuring that the needs of the members are prioritized over profits.
One Member, One Vote: Credit unions operate on the principle of “one member, one vote.” This means that every member has an equal say in the decisions that affect the credit union. Your vote carries the same weight regardless of how much money you have deposited.
Board of Directors: See your voice in action! BHFCU’s Board of Directors is composed of member volunteers elected by members to represent their interests. This volunteer-based leadership ensures that the credit union remains focused on the needs of its members rather than the demands of external investors.
#2 – Boosting your financial well-being.
Credit unions offer unique benefits as cooperatives that set them apart from other financial institutions. These advantages help ensure you’re getting what you want and need as a member.
Not-for-Profit Structure: Credit unions operate on a not-for-profit basis. This doesn’t mean they don’t make money—it means that any surplus earnings are reinvested back into the credit union or returned to members in the form of lower fees, better interest rates, and enhanced services. In contrast, traditional banks distribute profits to their shareholders.
Lower Fees and Better Rates: One of the most tangible benefits of credit union membership is access to lower fees and better interest rates. Credit unions often offer lower loan rates, higher savings rates, and fewer fees than traditional banks. This is possible because credit unions don’t have to pay dividends to shareholders; instead, they return profits to members.
Personalized Service: Credit unions are known for providing personalized service. Because they are smaller and community-focused, credit unions can take the time to understand each member’s unique financial situation and offer tailored advice and solutions.
Financial Education and Support: Credit unions are committed to helping their members make informed financial decisions. Many credit unions offer financial education programs, workshops, and one-on-one counseling sessions to help members navigate complex financial topics. Did you know BHFCU has partnered with financial literacy app Zogo? The app provides members with free tools to improve their knowledge of financial topics while earning real-life rewards!
#3 – Putting the community first.
Credit unions are commonly regionally based and, therefore, very connected with their communities.
Local Impact: Because credit unions are community-based, they often have a more significant impact on the local economy. They are more likely to support local initiatives, reinvest in the community, and provide financial services that meet the specific needs of the local population. This local focus helps strengthen the community as a whole.
Social Responsibility: Credit unions are guided by a sense of social responsibility. They regularly organize and participate in community-focused programs such as financial literacy workshops, scholarships, and charitable events, contributing to the overall well-being of the communities they serve. In 2023, BHFCU contributed $434,000+ through donations, sponsorships, and staff’s grassroots fundraising efforts.
Economic Impact: Supporting local businesses and economic development is one of the key ways credit unions fulfill their cooperative mission. Credit unions have a vested interest in the success of the local economy. They often provide loans and financial services to small businesses, helping them grow and create jobs. Credit unions contribute to overall economic development and stability by keeping money within the community.
What does it all mean?
Credit unions play a vital role in the community by supporting local businesses, providing financial education, and forming partnerships with community organizations. They are invested in the overall well-being of the communities they call home and the members they serve. Credit unions provide a unique opportunity for members to both enjoy the advantages of cooperative principles and feel good about what their money supports.