Credit unions provide another option for your finances. If you are not happy with the bank you have your money placed with presently or if you are looking for a brand new financial experience, this is another kind of banking institution worth checking out.
These alternatives to banks can be thought of as non-profit cooperative financial establishments that are owned and collectively controlled by the members that make them up. These organizations differ from banks in that the customers who open up accounts also become owners in the company. The members are able to vote and elect the board of directors. Credit unions are democratic in nature. Every person who is a member is given the right to vote. It has nothing to do with the amount of money that each customer has invested. A person could have $200 in an account, $2,000 or $20,000 and they are still permitted to vote.
Credit unions have their own type of policies that are not necessarily the same as other types of financial institutions. For example, interest rates are chosen by the volunteer board of directors who are elected by the present members of the establishment. In order to open an account and do transactions such as deposit money, withdraw money or apply for a loan, they are required to become a member of the business. Loans and any type of investments can only take place by those who are current members of the financial facility.
These places make it their primary goal to encourage and support the financial growth and stability of all of the members that make it up. How long a person has been a member does not matter. What matters is that the individual has joined and therefore has a say in all of the decisions that are made.
Organizations of this sort are not-for-profit or non-profit establishments. They can however be thought of as being for-profit enterprises in another sense because they make money for their members. The means by which this takes place is that the members earn profits based upon the reduced interest rates that the loans at the facility have. Another means of earning profits is based upon the dividends that are paid out to individuals on the savings they have made. Be aware that these products are all taxed as a regular source of income.
There is a business structure to credit companies. The structure is quite complex in nature and is not the same as its financial competitor, the banks. The goal behind credit unions is to make the members' shareholders and the shareholders members. By them being one, this eliminates a number of problems associated with other kinds of financial organizations.
Generally speaking, these establishments do not accept any form of monetary donations. In order to stay afloat, the company is expected to remain competitive in the industry. By holding its own, the business is able to remain strong.