Credit Union Savings Account

How Does a Credit Union Savings Account Work

What precisely is a credit union and how is it different from a commercial bank? The main point of differentiation is in who owns these establishments and who can use them. While a commercial bank is owned publicly – or by private investors prior to its IPO – and is largely open to public use, a credit union is generally funded by members of a group who either work together or have a common interest. Credit unions are common on college campuses; and often are only available to card carrying members.

How do you go about starting a credit union savings account? If you're a student at a major university, there may be a credit union on campus – and you may already have a credit union savings account, even though you did not create it yourself. Such a student credit union savings account is often used to disburse extra funding from the financial aid office to students. A student can then either directly remove this money from his or her account or spend it through a campus card.

If you aren't looking to open a student credit union savings account, but instead wish to open an account with your employer, you can usually do so by simply going to the credit union with the proper ID (to prove where you work and who you are).

What are the advantages of a credit union savings account over a traditional savings account at a commercial bank? There are two primary advantages: one is that the membership fees should be drastically reduced, as the credit union was established specifically for your benefit. The other advantage is that all paperwork with your employer is streamlined. For instance, if you want to use direct deposit, the transactions will be virtually instant.