Treadwell likes the savings account at his credit union, where he’s been a member for about a year. “I’m saving for a variety of things,” says the graphic designer, who recently got engaged. “At my credit union, I can split up my savings account and label the categories.” Treadwell’s credit union offers a kind of starter certificate of deposit, which a member can begin funding with a low deposit, say, $25, instead of needing the minimum $1,000 up front. The member can keep adding to it until the certificate is fully funded—all the time earning the same 12-month rate—and rolled over into a regular 12-month certificate.
Your money is safe in a credit union. Deposits with all federal credit unions are insured up to $250,000 by the National Credit Union Share Insurance Fund; most state-chartered credit unions are also covered by the fund. Other state-chartered credit unions’ deposits are privately insured by American Share Insurance.
Credit union members tend to be more satisfied with services. According to a study by Forrester Research, 70% of credit union members surveyed said their financial institution puts their interests first. The entities consistently outperform banks in areas such as quality of support and ease of conducting business, according to a recent report by the Filene Research Institute, a credit union research organization. At the same time, Americans have lost faith in banks. A recent Pew Research Center poll found that more than two-thirds of consumers have an unfavorable opinion of large banking institutions.
It’s not surprising that credit unions have enjoyed steady growth. Figures from the Credit Union National Association show that membership growth from 2004 to 2008 averaged 2.3%; in 2009, even after a year of financial tumult, membership grew 2.25%. During that same five-year period, savings in credit unions grew from more than $570 billion to more than $690 billion. Credit union assets have steadily increased as well: In the last 10 years alone, they have more than doubled—from $422 billion to $904 billion.
None of this surprises Tonita Webb, vice president and chief human resources officer at Seattle Metropolitan Credit Union. Five years ago, the 40-year-old went strictly credit union and hasn’t looked back. “When I began working for Metropolitan, I fully understood the credit union philosophy and knew I wanted to be part of it.”