Different Types of Credit Unions

Join a credit union to start taking control of your finances. For those who don’t know what a credit union is, it is a non-profit organization that accept deposits, make loans and provides a wide array of other financial services. It’s similar to a bank with several key differences. If you want to know more about the difference between a bank and a credit union, check out our What Is the Difference Between Banks and Credit Unions? post to learn more. For credit unions, depending on your employer, community, church or other organizations you are involved with, there might be a variety of global credit unions, national credit unions or local credit unions that you can choose from. Learn the differences among the different types of credit unions so you can find the best credit union for your financial needs.

Types of Credit Unions

The NCUA, or National Credit Union Association, divides credit union types into two categories: federal credit unions and federally insured state credit unions. The NCUA regulates all federal credit and is insured by the National Credit Union Share Insurance Fund. It also happens to cover federally insured state credit unions.

In addition, there are other credit unions don’t fall into these categories. For example, while there are federally insured credit unions, there are also state-charted credit unions that are privately insured. Private insurers still cover credit union deposits, but unlike federally insured unions, private insurance is not backed by the full faith and credit of the U.S. government.

The NCUA further breaks down credit unions by field-of-membership type. Here are the NCUA’s categories for types of fields of membership:

• Community credit unions
• Associational credit unions, including faith-based or fraternal groups
• Educational credit unions
• Military credit unions
• Federal, state and local government credit unions
• Manufacturing industry credit unions for industries such as chemicals and machinery
• Service industry credit unions for industries such as finance, health care and transportation
• Corporate credit unions
• Multiple common bond credit unions
• Non-federal credit unions

4 Main Types of Credit Unions

While there are many types of credit unions, there are really only four main ones to be concerned with:

• Employer credit unions
  • Employers often sponsor credit unions for their employees. Employee credit unions can represent workers from a diverse range of fields. People in the following professions and those in other, similar groups often have their own credit unions: police officers, firemen, teachers, postal employees, transit workers, and government workers.
• Group credit unions
  • Some churches and other groups such as fraternal organizations also have credit unions. Similar to employer credit unions, you must be a member of the specific organization in order to open an account at their credit union. Examples of group credit unions include association credit unions and military credit unions.
• Local credit unions
  • Organizations, activities and job titles aren’t the only things that determine who is represented through a credit union, though. Credit unions exist for residents of certain cities, as well. One example of a community credit union is Greylock Federal Credit Union, which draws its members from people living in specific locations in Massachusetts.
• Federal credit unions
  • The Federal Credit Union Act of 1934 authorized the formation of credit unions in the United States. The law was designed to make credit more widely available to Americans via nonprofit credit unions. Some national credit unions allow you to join online, and only require you to be over 18 years old and a U.S. citizen or permanent resident.

After reading about the different types of credit unions, you can successfully determine which one is the right one for you.

Author’s Verdict

After reading about the different types of credit unions, you can determine which one suits you the best. Credit unions can be useful and gratifying when used correctly, so good luck finding the right one for you! If you don’t have a credit card to use with a credit union, check out our Best Credit Card Categories master post to sign up.