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What is a Credit Union?

Credit unions are non profitable institutions that are set up to promote thrift, providing credit at lower rates as well as providing other financial services to the members. Sometimes in different places the definition varies such that the organization become a profit oriented institution but with a lesser margin of profits.

Credit unions vs. Financial Institutions:
The former differs from the financial institutions in a way such that the members who have accounts in them are owners of the Credit union and get to select the board of directors. They do so by a democratic one vote - one person way irrespective of the amount they have invested or have in the institution. Also the policies that govern the credit rates are taken by a volunteer Board which is selected by the members. A very good decision to make when affronted with a dilemma or clashing ideas of having such a account or a bank is to use both of the products. There will be a very good possibility of having both the security the banks offer and the interest rate the institutions offer.

Becoming a Member and Member Services:
Becoming a part of the union is based upon the rules of the organization and there are restrictions that apply to selecting or taking in a new member. They may have a common bond such as that they may belong to a same area or work place or a community. They are basically member oriented and it has most of it services oriented towards the members and only they can access its services. Also they get priority and their financial health is improved by their membership in the institutions. They also indulge in promoting themselves as member oriented which gives the union much more credibility as it has extensive analysis of the financial status of a member.

Products and Personnel of Credit Union:
The Credit union offers various services like money loaning, savings account, share draft, credit cards, online banking and certificates of deposit. More over most of these organizations offer the same products as a bank but they do not cover the amount of customer that a bank does. The people working in the organization are almost like the staff working in banks. They also have an upper management hierarchy which takes, most of the managerial decisions. The people who form the board committee are volunteers, who do not get paid. We need not view them as a management but just as members who have a say in the decisions the company take.

Safety of Money:
The money involved is as safe as the one deposited in a nationalized bank. However the prudent way is to be careful about anything regarding money, but a person can be assured that his money will be very safe. Also the Canadian version of the organization differs from the ordinary one and the main difference is that Canadians have made their unions as profitable organizations.

Thus the Credit union is a member oriented way of organizing the finances and not an n replacement of banks. It is just reinforcement.

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