Credit unions are non-profit financial institutions which are owned and operated for the benefit of their members and also the surrounding community. The management includes elected volunteers of a board of directors who are responsible for the decision making regarding the operation of the credit union. The credit unions concept originated in the United Kingdom and was established in the United States in the year 1908.
The credit unions work with members sharing a common bond of employer, branch of the military or government, educational institution, church or community. Everyone is eligible to become a member of the credit unions, provided they satisfy the required criteria.
Advantages of a Credit Union
1. Credit Unions offer higher rates of interest on deposits and lower ones on loans since they operate on a non-profit basis.
2. Credit Unions are easily accessible with the advent of online banking.
3. The business gets done faster and is therefore more convenient.
4. The account holders become the partial owners of the institution and therefore the financial decisions are taken in favor of the members.
5. The extra money made by the institution is given to the account holders in the form of dividends.
6. Credit Unions are safe as they do not involve risky loans and unusual investments and remain untouched by the financial crisis.
