Credit Union FAQs

Common questions and answers about credit unions. Click on the question to view the answer.

• What is a credit union?

  A credit union is a not-for-profit financial institution. Credit unions provide products and services to people who share something in common, such as where they work or live, or even their nationality. There are just under 150 credit unions across the state with roughly 1.5 million members.

   

• What are some unique characteristics of credit unions?

  Credit unions and banks typically offer similar products and services, but credit unions have some unique characteristics, including:

  • Credit unions are not-for-profit cooperatives

  • Credit unions may return earnings to members, which could be in the form of lower loan rates, higher savings rates, and free or low-cost services

  • Each person who deposits money into the credit union is a member with a share of ownership

  • Credit unions are only allowed to serve a select group of individuals that have a common bond such as where they work, live, or even their religion

   

• Who can join a credit union?

  Most people can find a credit union they are eligible to join. Credit union members generally share the occupation (employer or industry), residence (live or work in the same city, county or metropolitan area), association (same church, professional, civic or fraternal group, etc.) and family (membership is extended to you if any of your immediate family is a member). Federal and state credit union laws restrict credit unions to serving only the groups specified in their charters. The group or groups served by a credit union are referred to as its “field of membership.”

  To find a credit union you are eligible to join, visit the Minnesota Credit Unions website. 

   

   

• Why are credit union customers called members?

  When a person joins a credit union, they are considered a member because they are one of the owners and shareholders of the institution. This allows all members to have a voice in the operation of the organization regardless of the amount of money each person has on deposit.

   

• What does it mean that a credit union is not-for-profit?

  Credit unions exist to serve their members. All of a credit union’s profits may be returned to members (depending on capitalization requirements), which can result in fewer fees, lower rates on loans, and higher rates on savings.

   

• Is my money safe at a credit union?

  Just as banks have FDIC insurance, money at the credit union is also backed by the full faith and credit of the federal government. The National Credit Union Share Insurance Fund (NCUSIF) insures a member’s shares on deposit at a credit union up to a minimum of $250,000. In other words, the NCUSIF is the FDIC equivalent for credit unions.