Millennials are the largest living generation in the United States. Based on current projections, millennials are expected to overtake Baby Boomers in population as their numbers swell to 73 million in 2019. Research has shown that millennials care deeply about their local communities. We all know that credit unions are community-focused and provide excellent member service while offering competitive rates.
If you are a millennial and have never considered joining a credit union, here are 5 reasons why it may be a great fit for your personal finance needs.
- Not-for-Profit Model – Just like banks, credit unions accept deposits, make loans and provide various financial services. When you open an account with a credit union, you become a member (aka an owner) of that credit union. The profits made by credit unions are returned to its members in the form of higher savings rates, reduced fees and lower interest rates. This not-for-profit model changes the business focus from generating the most profits possible to creating the best member service and helping the community. A key differentiator between a bank and a credit union is that the sole purpose of a credit union is to serve its members.
- Better Interest Rates & Low Fees – Millennials keep more of their assets in cash than any other generation. So, it is important to keep cash in a place with less market fluctuation, yet good returns. Credit unions often have better rates on savings accounts & CDs. You can find better rates by shopping around at local credit unions as well. Credit unions aren’t concerned about passing off profits to shareholders so they can offer better rates to members instead. Eighty-two percent of the nation’s largest credit unions offer free checking compared to just 38 percent of banks. Free checking is a great option for a lot of millennials who live from paycheck to paycheck.
- Greater Financial Literacy Resources – According to a Credit Karma survey, nearly 40% of millennials spend more than they earn. Credit unions can help millennials become better with money and thrive financially. Credit unions offer regular seminars and events on important financial topics. Most of these educational opportunities are free and are not a sales pitch for financial products. Some credit unions have even launched web-based learning resources to make learning more fun and interactive. Some credit unions have actually partnered with various schools and educators, bringing branches to the cafeteria.
- Better Member Service – Credit unions are known to be more customer-friendly. They go above and beyond to help their members reach financial success. Credit unions are connected with the local community, and that helps them be aligned better with their members. They tend to be more flexible about working through tough issues such as less than perfect credit during a loan application process. Large banks have complex structures and it can be difficult for an average consumer to reach the people who have authority to help. Customer focus is ingrained in the CU model, and members get a strong sense of inclusion.
- Embracing Digital – Credit union membership has evolved. It is a misconception that credit unions don’t offer the latest technology. Credit unions understand that millennials are a key demographic and are constantly looking at digitizing their tools. Many credit unions are embracing FinTech to make the experience exceptional for millennials. They are trying to strike the right balance between offering digital banking features while offering a personalized experience.
Credit unions bring a lot to the table. They offer great rates and rewards but most importantly they help you feel like a part of a tight-knit financial community. All in all, credit unions are great financial service providers that can help millennials accomplish their life-long financial goals.
This post was originally published by John Dearing (Partner at Capstone) on CUInsight.