April 5, 2021

Best Credit Union

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Credit unions offer the same products, but are they really better than banks? Discover the best credit unions for saving, checking, auto loans, and more.

Just like banks, choosing a credit union can be tough. Some are better for banking, others are great for loans.

Choose your ideal fit in this guide to the best federal credit unions.

Best Credit Union for Auto Loans - Pentagon Federal

Of all the credit unions we surveyed, Pentagon Federal has the best offerings on auto loans. A 36-month new or refinance auto loan starts at just 2.14% APR. Used auto loans start at 2.99%

For really jaw-dropping rates, take advantage of their Car Buying Service. Use their database to search for the car you want, and PenFed will connect you to a nearby dealership that carries it. On top of that, you'll get a 1.39% APR for a 36-month loan term.

  • Membership Requirements: U.S. citizen or permanent resident of the U.S.
  • Features: Mobile app, member discounts, financial hardship counseling
  • ATMS and Branches: 50 branches across 13 states, 85,000 surcharge-free ATMs

Best Credit Union for Mortgages - Navy Federal Credit Union

Navy Federal offers a wide variety of mortgage products for both purchasing and refinancing. Members can get VA loans, adjustable and fixed-rate mortgages, and jumbo loans with a low down payment or no down payment at all.

If you're a first-time homebuyer, check out their Homebuyers Choice Program. It offers a fixed-rate 30-year loan, no mortgage insurance premiums, and up to 100% financing.

Plus, you can get pre-approved, upload documents, and manage your loan completely online.

  • Membership Requirements: Active or retired U.S. military or family member
  • Features: App with mobile deposits, mortgage rate matching, member discounts
  • ATMS and Branches: 344 branches worldwide, 30,000+ surcharge-free ATMs

Best Credit Union for Personal Loans - First Tech

With a fast online application, modest APRs, and plenty of customizations, First Tech stands out for its personal loan offerings.

Members can get an unsecured personal loan in as little as a day. Loan amounts range from $500 to $50,000 with terms between 2 and 7 years. Plus, their APRs start around just 6.70%, which blows most online lenders out of the water.

  • Membership Requirements: Work for a qualifying tech company or the state of Oregon; work or live in Lane County, Oregon; belong to a qualifying association
  • Features: Mobile app, extensive insurance products, dividend checking accounts
  • ATMs and Branches: 40 branches in 8 states, 30,000+ surcharge-free ATMs

How safe are credit unions?
Credit unions have their own government agency that supervises, regulates, and insures all federally charted credit unions: The National Credit Union Administration.

Like the FDIC, the NCUA insures your funds up to $250,000 if the credit union were to fail (excluding investment accounts, just like the FDIC). But keep in mind, the NCUA does not oversee state-chartered (or private) credit unions. Luckily, those only account for 2% of credit unions.

Best Credit Union for Checking - Consumer's

Looking to make the most of your checking account (and don't mind going through a few hoops)? Consumer's Credit Union easily earns top spot for their staggering 4.09% APY and no monthly fees.

Keep in mind, there are requirements to earn the 4.09%, one of which is spending at least $1,000 monthly with their Visa credit card. But if you make any regular business (or personal) purchases, that's probably easier than you think.

You can still get checking APYs between 2 and 3% by hitting fewer requirements, which you can check out on their page.

  • Membership Requirements: Join the Consumers Cooperative Association (anyone can join for a one-time $5 fee)
  • Features: App with mobile deposits, no minimum checking balance
  • ATMs and Branches: 12 branches in Illinois, 5,000 shared branches, 30,000+ surcharge-free ATMs

Best Credit Union for Savings - Alliant

Alliant is our top choice for savings, but not because they offer the highest APYs. Their High-Rate Savings Account has a reasonable 0.55% APY, but it's the no-maximum-balance that makes it a winner.

Many credit unions offer high APYs on only the first $1,000 in your account. Then, they'll apply a much lower APY (like 0.25%) to the rest of your balance.

If you're saving up for a big purchase or stashing away your emergency fund, a savings account with Alliant is the way to go.

  • Membership Requirements: Work for a qualifying company, live near Chicago, or join Alliant's partner charity
  • Features: App with mobile deposits, sign-up bonuses for specific accounts
  • ATMs and Branches: No branches, 80,000+ surcharge-free ATMs

The Best Credit Union for College Students
Alliant also earns the title of best credit union for college students. Their membership eligibility is open to just about everyone, they offer more ATMs than most other CUs, and they charge zero monthly fees. They're also one of the most tech-savvy credit unions in the business - perfect for college students who prefer to manage finances online.

Best Credit Union for Small Businesses - America First

Membership to America First is more restricted, but their banking and loan products for businesses still outshine the competition (and even the big banks).

They offer secured and unsecured SBA loans, lines of credit, and loans for vehicles, commercial real estate, and even machinery.

Small business owners can also business checking accounts, savings, certificates, and Visa cards.

  • Membership Requirements: Live in a qualifying area of the western U.S., work at a qualifying company
  • Features: Mobile app, 24/7 fraud protection, cash transfer with Zelle
  • ATMs and Branches: 115 branches, 30,000+ surcharge-free ATMs

What are the downsides of a credit union?
Credit unions will usually have fewer physical branches and ATMs than a big bank. They also have a reputation for not being as technologically advanced as banks are. In general, people are okay sacrificing those things to get the personalized customer service and higher APYs that a credit union offers.

How to Choose a Credit Union

Not all credit unions are the same. To find the best fit for you, weigh the following four factors.

  1. Location: Some credit unions are online or only in specific states. If you prefer visiting a physical branch, make sure your credit union is nearby and easy to get to.

  2. Eligibility: An easy way to narrow down your search is by confirming your eligibility. Many credit unions are open to all, but most restrict membership by where you work or live.

  3. Fees: Before applying for membership, confirm that the credit union features low fees, or none at all. Your account should not cost you more in fees than you'd earn in interest.

  4. Rates: Credit unions are attractive for their high APYs and low APRs. Make sure you understand how these rates affect your balance and whether the interest rate is tiered.

How to Join a Credit Union

Joining a credit union can be incredibly easy and quick. Here's what to do:

  1. Meet the eligibility requirements.
    You may be eligible to join a credit union based on where you live (i.e., a specific city, county or state), where you work, what groups you're a part of (like a trade association), or even who your relatives are (many CUs let relatives of members join).

  2. Bring a little cash to make your first deposit.
    Opening an account with a credit union usually requires a small fee that acts as your initial deposit. In most cases, it's between $5 and $25, and can be made via cash, check, or transferred electronically from another bank account.

  3. Fill out the application, either online or in-person.
    Most credit unions make it easy on you by letting you apply online, but you can visit a branch if you'd like. The application usually asks for your name, date of birth, physical address, contact info, state-issued ID, and employment info.

Bottom Line

With high-quality customer service, a variety of products, and eye-popping rates, credit unions are giving big banks a run for their money. Consider all your options to see what works for your needs. Be sure to check the fine print of any account to understand the requirements and avoid fees.

Holly Zorbas is a guardian of content and community at CreditDonkey, a bank comparison and reviews website. Write to Holly Zorbas at holly.zorbas@creditdonkey.com. Follow us on Twitter and Facebook for our latest posts.

Read Next:

Why Credit Unions May Be Best Place to Bank

Advantages of Credit Unions

Credit Unions vs Banks

Credit Unions vs Banks

How to Choose a Bank: Beginner's Guide

How to Choose a Bank


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