Credit Union

A not-for-profit financial institution owned by its members and represented by a volunteer board of directors who are elected by the membership. Credit Unions are formed by people who join together to form a common bond. To become a member, you must meet the credit union’s field of membership requirements and open a share account. Credit unions make money by loaning other members your savings. The members who borrow money from the credit union pay interest on their loan (like rent for using the money). The credit union then takes the interest from the loans and pays you a dividend on your share account.

Credit unions are financial cooperatives set up by employee and community associations, labor unions, church groups, and other organizations. They provide affordable financial services to members of the sponsoring organization.

In some cases, they're created in rural or economically disadvantaged areas, where commercial banks may be scarce or prohibitively expensive.

Because they are not-for-profit, credit unions tend to charge lower fees and interest rates on loans than commercial banks while paying higher interest rates on savings and investment accounts.

The services offered at large credit unions can be as comprehensive as those at large banks. At smaller credit unions, however, services and hours may be more limited, and a few deposits may not be insured.

Assets in most credit unions are insured by the National Credit Union Share Insurance Fund on the same terms that deposits in national and state banks are insured by the Federal Deposit Insurance Corporation (FDIC).

A cooperative, nonprofit association, licensed under for the purposes of encouraging thrift among its members, creating a source of credit at a fair and reasonable rate of interest and providing an opportunity for its members to use and control their own money to improve their economic and social condition. Membership is limited as provided in section 36a-438 of the banking laws. Similar to the dual banking system, credit unions may be chartered by either states or the federal government. The National Credit Union Administration (NCUA) is a federal government agency responsible for chartering and supervising federal credit unions. You can identify a federally chartered credit union by the word "federal" in its name. The primary regulator for a particular institution operating in Connecticut may be found in our credit union listing.

A non-profit financial institution federally regulated and owned by the members or people who use their services. Credit unions serve groups that hold a common interest and you have to become a member to use the available services.