Credit unions are like banks where every customer has a say in the way the company works. Credit unions do not operate to generate a large profit margin, unlike banks.

Typically, credit unions offer restricted membership to people who work for a certain company or type of company or live in a certain region. For example, a state may have a credit union that only people working for the state can join. Many companies offer credit unions only to their employees or their immediate family members.

Credit unions sometimes offer better interest rates than many banks. Money market accounts and CDs at credit unions can provide a few percentage points higher in interest to those who keep their money in the accounts, and loans are often offered at better rates than traditional banks can provide.

Since credit unions are owned by their members, they often provide better customer service than traditional banks as well.

If you have a credit union available through your job or elsewhere, look into opening an account. You will probably earn more interest from your money and find that the institution cares more about keeping you happy than your old bank did.

Learn more about this author, Tara Croft.
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