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From a functional standpoint, there isn’t much difference between a credit union and a bank. Both offer a variety of deposit accounts, loans, and credit accounts to personal and business customers. But credit unions differ in that they are owned by their members instead of shareholders. They're also organized as nonprofit enterprises.
As a result, you’ll often find more competitive rates at credit unions than at many banks. Often, there's just as wide a choice of products and accounts. That makes them an excellent choice for your banking needs.
We’ve identified credit unions open to customers nationwide and then compared interest rates, account types and features, the ability to bank in-branch, and the ease of membership to whittle the list down to our top picks in six categories.
Best Credit Unions for 2023
- Best Overall: Blue Federal Credit Union
- Best for Checking: Liberty Federal Credit Union
- Best for a Savings Account: Alliant Credit Union
- Best for CDs: Hiway Credit Union
- Best for Military Individuals & Families: Service Credit Union
- Best If You Have Kids: First Tech Federal Credit Union
In the News: In general, credit unions outperform banks both in terms of the APYs they pay on savings and the interest rates charged to customers for borrowing money. According to recent figures from the National Credit Union Administration (NCUA), credit unions offered their customers an average interest rate of 0.61% on money market accounts in Q2 2023 compared to an average interest rate of 0.50% from banks. Meanwhile, during the same time period credit unions charged an average interest rate of 5.82% for a 60-month new car loan versus an average of 6.44% from banks for the same type of loan.
Best Overall : Blue Federal Credit Union
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Blue Federal Credit Union
- Membership for all: In Wyoming and Colorado, with donation
- High-yield accounts: Savings and CDs
- Online only: No
Blue Federal Credit Union offers virtually every type of account or loan you’ll need and pays well-above-average rates. It charges zero or minimal fees and is very easy for anyone to join. Add in-person banking at thousands of credit union branches across the country, and you can see why we’ve named it our best overall credit union.
One-stop-shop for most consumers’ every banking need
Five checking account choices, including free and high-yield options
Savings and CD rates at two or more times the national average
Ability to bank in-branch at more than 5,000 credit union locations nationwide
A handful of other credit unions and online banks offer higher savings and CD rates
Not as large an ATM footprint as some networks
Blue Federal Credit Union has a full-service menu offering checking, savings, money market, and CD accounts. It also offers health savings, IRA, and business accounts, and multiple credit cards. Moreover, Blue has most of the loans you could want, including mortgages, vehicle loans for students, personal, and business loans. It has great rates and in-person access.
Fees are low or non-existent for most accounts. Plus, rates on savings and CDs are higher than the national average. Meanwhile, its high-yield checking option is one easy to qualify for, requiring just 10 debit transactions per month instead of the more typical 12 to 15.
Blue participates in the Co-Op Shared Branch network of credit unions. This enables you to bank at more than 5,000 credit union locations throughout the U.S., as well as use more than 30,000 nationwide ATMs.
Blue Federal Credit Union targets Wyoming and Colorado. People in those states who don’t meet the credit union’s standard eligibility requirements can join by simply donating $5 to the affiliated Blue Foundation and keeping a minimal $5 in savings.
Best for Checking : Liberty Federal Credit Union
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- Membership for all: Within the field of membership, with donation
- High-yield accounts: Checking
- Online only: No
Liberty Federal Credit Union, previously known as Evansville Teachers Federal Credit Union, offers an open door to everyone within its field of membership. And with its extensive choice of checking accounts, including one of the best high-yield options anywhere, it wins our honors for best credit union for checking.
High-yield checking account with a chart-topping rate on balances up to $20,000
Option to earn rewards points instead of a high APY
Ten free ATM withdrawals
CD rates are high, but no high-yield savings account available
Free checks only for those under age 23 or older than 55
No youth or teen accounts
Liberty Federal Credit Union (LFCU) covers all the checking account options, including a basic free checking account, debit card, or a money market account that pays more than the national average. They also have two accounts in which you can earn a phenomenal rate or rewards if you use your debit card regularly.
If you’re willing to regularly use a debit card, you can earn much more with LFCU’s Vertical Checking account. This high-yield account currently pays 3.45% APY on balances up to $20,000.
To earn this impressive rate in any given month, make at least 15 debit card purchases, arrange for one or more direct deposits, login at least once via online or mobile banking, and sign up for paperless statements.
With the same monthly qualifications, you can instead opt for Platinum Rewards Checking, which pays one point per dollar spent with an LFCU credit card, or two dollars spent with an LFCU debit card. Redeem accumulated points for merchandise, cash back, gift cards, or travel.
Joining LFCU is easy and open to all who are members of organizations in its field of membership or employed by or retired from an employee group in its field of membership. Membership entitles you to all the banking and loan services the credit union offers. Just make a $5 donation to their affiliated nonprofit, the Mater Dei Friends & Alumni Association, and keep at least $5 in your member savings account.
Best for a Savings Account : Alliant Credit Union
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Alliant Credit Union
- Membership for all: With affiliate membership fee
- High-yield accounts: Savings
- Online only: Yes
As an online-only institution operating out of the Chicago area, Alliant doesn’t have to spend money on maintaining physical branches. This allows it to pay higher rates. As a result, we’ve named it our best credit union for a savings account.
Earn almost nine times the national average rate for a savings account
Competitive checking account and CD rates
Access to 80,000 free ATMs, plus refunds up to $20 per month on out-of-network ATMs
Youth savings and teen checking available
No physical branches, and not part of a shared branch network
No health savings accounts (HSAs)
No business accounts
If a high-yield savings account is among your banking priorities, Alliant Credit Union is an excellent option.
Its High-Rate Savings currently pays almost nine times more than the Federal Deposit Insurance Corporation (FDIC)’s recent national average savings account rate of 0.33%, and it has no fees as long as you sign up for paperless statements.
It also offer a high-rate checking account, teen checking, and certificates of deposit (CDs) with competitive rates. All this makes it a viable option to handle most of your everyday banking needs.
What you can’t get with Alliant is in-person banking, as there are no Alliant branches and they don’t participate in the shared network for credit unions. But you can access a very broad and deep network of ATMs, with 80,000 of them fee-free across the country, and up to $20 reimbursed to you per month for any ATM fees you incur out-of-network.
Joining Alliant is not only easy but free. If you don't meet standard eligibility requirements, you can become a member of Alliant's affiliated nonprofit Foster Care to Success. Alliant will cover the one-time $5 membership fee.
Best for CDs : Hiway Credit Union
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Hiway Credit Union
- Membership for all: With donation
- High-yield accounts: CDs and checking
- Online only: No
Hiway Credit Union is a full-service credit union offering virtually every type of bank account, credit card, or loan, but where it really shines is in its stellar rates on certificates of deposit. While many institutions offer mildly competitive rates on most certificate terms and perhaps a standout rate as a promotion on one particular term, Hiway’s rates are well above average for all terms. This landed it at the top of our category for best credit union for CDs.
Consistently pays CD rates that are higher than average across all major CD terms
Also offers a high-yield checking account
One-stop-shop for almost every consumer or business banking or borrowing need
Access to over 64,000 free ATMs and 5,000 shared branches nationwide
Earning the highest CD rates requires a $25,000 minimum per certificate
Rates on its savings accounts are below the national average
No teen checking account, and the youth savings account pays a lackluster rate
Hiway's one-year CD rate is greater than the FDIC’s January 2023 national average of 1.28% APY. And for a five-year certificate, you can earn more than double the national average of 1.21% APY. Those with modest savings can open a CD with just $500. You can earn more by putting a bigger balance into the CD, with additional rate tiers at $10,000 and $25,000 per certificate.
A visit to Hiway’s website quickly impresses with a customer-friendly design and a full slate of bank account types. These include HSA, Coverdell Education Savings Accounts, Youth Savings, as well as IRAs, credit cards, all major consumer loans (other than student loans), and business offerings. As a member of the Co-Op Shared Branch network, you can conduct in-person transactions at 5,000 credit union offices nationwide.
If you don’t live or work in Minnesota or qualify through your employer, you can join Hiway with a simple $10 donation to either the Hiway Credit Union Foundation or the Minnesota Rec & Parks Foundation, plus $5 deposited into a member savings account.
Best for Military Individuals & Families : Service Credit Union
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Service Credit Union
- Membership for all: Military personnel, or with annual fee
- High-yield accounts: Savings
- Online only: No
Service Credit Union offers great rates (and even better bonus rates for deployed individuals), few fees, and low minimums. This makes it our pick for the best credit union for active and veteran military personnel and their families.
Exceptional rates on savings accounts
A free no-minimum checking account that pays interest
Low minimum deposits for CDs with competitive rates
Access to over 85,000 free ATMs and 5,000+ shared branches nationwide
No high-yield checking option
For larger savings account balances, online banks pay more
Though its CDs are competitive, higher rates can be had elsewhere
Service Credit Union puts the focus on active duty military personnel, veterans, and their family members. The result is a full-range credit union that pays some of the best rates available.
At Service, you can earn many times the average national rate on savings accounts. A balance up to $500 currently earns 5.00% APY.
Service offers other great reasons to join. Its checking account is free, has no minimum balance requirement, and pays interest. Its CDs have a low minimum deposit requirement of just $500 with competitive rates. It also offers a holiday savings account that pays an appealing rate.
Among Service’s most attractive offerings is its Deployed Warrior Savings account, which is open to those currently on active duty in a combat zone. For those who qualify, the account pays an eye-popping rate of 10% APY on balances up to $10,000.
Membership in Service Credit Union is open to anyone who is active duty military, a veteran, or a current or former employee of the Department of Defense or other select employers. Those who are directly related to a military individual are also eligible, including not just immediate household members but also siblings, parents, grandparents, and grandchildren. In addition, non-military individuals can become members by joining the American Consumer Council (free of charge) or the Financial Fitness Association.
Best If You Have Kids : First Tech Federal Credit Union
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First Tech Federal Credit Union
- Membership for all: With affiliate membership
- High-yield accounts: Savings for children
- Online only: No
Easy-to-join First Tech Credit Union wins our top prize for the best credit union for families with children. A youth bank account can be a great way to instill smart money skills at an early age. First Tech’s Start Up Savings account pays a phenomenal 5% APY on all balances up to $1,000 with a minimum balance requirement of $5.
Pays one of the highest national rates on savings accounts for minors, and offers fee-free youth checking
Accounts for parents include high-yield checking, a top-paying HSA, and low-interest credit cards
Access to free ATMs and 5,600 shared branches nationwide
Except for kids' savings, savings account rates are subpar
CD rates aren’t very competitive
No free checks on either adult checking account
California-based First Tech offers a Start Up Checking account for kids. This account features a great rate, no fees, and is open to any age child up to age 18. With parental consent, your child can have a debit card. The checking account also has no minimum balance requirement.
First Tech has plenty to offer parents as well, providing a full array of accounts, credit cards, and loans. Especially attractive is no membership fee. All that’s required is that each member keep $5 in their member savings account.
Final Verdict
If you’re in the market for an all-in-one banking option and expect to use a variety of products, it’s hard to beat Blue Federal Credit Union. Its extensive selection of accounts, credit cards, and loans is enhanced by rates that overshadow the majority of financial institutions. Plus, it features no or low fees and an easy membership process.
On top of that, with Blue’s participation in the Co-Op Shared Branch network, you can do in-branch business at thousands of credit union locations across the U.S.
Compare the Best Credit Unions
| Financial Institution | Why We Picked It | Key Benefit |
|---|---|---|
| Blue Federal Credit Union | Best Overall | Completely full-service with good to great rates across products |
| Liberty Federal Credit Union | Best for Checking | Best-in-class rewards checking, as well as other checking options |
| Alliant Credit Union | Best for a Savings Account | Among the highest savings account rates paid by a nationwide credit union |
| Hiway Federal Credit Union | Best for CDs | CD rates consistently rank among the top nationwide |
| Service Credit Union | Best for Military Individuals & Families | Exceptional savings rates, especially for deployed individuals |
| First Tech Federal Credit Union | Best If You Have Kids | Youth savings account pays a top national rate |
Pros and Cons of Credit Unions
Higher annual percentage yields
Lower borrowing rates and fees
Member-owned
NCUA insurance
Membership requirements
Higher rates may be available elsewhere
Limited branch availability
Pros Explained
- Higher annual percentage yields: Compared to banks, credit unions often offer their members higher average annual percentage yields (APYs) on many different types of deposit accounts. This is possible in part because credit unions are exempt from federal taxes due to their not-for-profit status.
- Lower borrowing rates and fees: Credit unions are also known for lower interest rates on financing products like mortgages, auto loans, credit cards, and more. According to the NCUA, the average interest rate on a 30-year fixed-rate mortgage was 6.57% at credit unions in March 2023. Banks charged their customers an average of 6.61% for the same type of loan. Meanwhile, credit union customers paid an average interest rate of 12.27% for classic credit cards in March 2023 while bank customers paid 13.96%.
- Member-owned: As a member of a credit union, you hold a small ownership interest in your financial institution. That means you have a voice in policies, leadership choices, and more. This may be one of the primary reasons credit unions often have a reputation for superior customer service compared to banks.
- NCUA insurance: If you join a credit union that’s a member of the National Credit Union Administration, your deposits will be federally insured up to $250,000 (per share owner, per account ownership category). This is the credit union equivalent of FDIC insurance.
Cons Explained
- Membership requirements: To bank at a credit union, you must first become a member. This is usually a simple process. However, some credit unions may be less lenient and restrict membership to people who can meet specific eligibility requirements (e.g., members of the military, employees of certain businesses, labor union members, etc.).
- Higher rates may be available elsewhere: Although credit unions often offer higher APYs on deposit accounts compared to brick-and-mortar banks, they don’t necessarily have the best interest rates around. The best online banks may offer interest rates on high-yield savings accounts, certificates of deposit (CDs), and more that far exceed the rates available from the average credit union.
- Limited branch availability: Credit unions often have fewer physical locations than traditional banks. If you’re someone who prefers in-person banking, this could be a challenge.
Alternatives to Credit Unions
A credit union can be a great solution for your everyday banking needs. However, if you don’t believe an account with a traditional credit union is right for you, here are a few other options to consider.
- Traditional banks: Big banks sometimes have a bad reputation for lack of individualized customer service, higher fees, and less competitive interest rates. Yet there can be perks to choosing a big, traditional bank for your financial needs as well—such as superior online and mobile tools, wide branch and ATM availability (even abroad), and a larger offering of services.
- Online banks: If you don’t need to visit a local bank branch, online banking can offer many benefits. In fact, it’s often possible to find the most attractive interest rates from online banks. After all, these types of financial institutions don’t have to pay the upkeep of maintaining brick-and-mortar branches. So, they’re able to pass the savings along to their customers.
- Community banks: If you’re looking for a bank with a more personalized approach to customer service, a smaller, community bank might be a good fit for you. Community banks tend to serve specific geographic areas and have limited branch locations. However, interest rates may be more competitive than those of larger financial institutions.
- Reloadable prepaid cards: A prepaid debit card isn’t a perfect alternative to a credit union. But if you’re unable to open a traditional deposit account at a financial institution due to ChexSystems issues or other challenges (or you prefer not to do so), this approach could offer some cash management solutions. Reloadable prepaid debit cards may feature the capability to receive direct deposits, to pay for purchases, and to withdraw cash at ATMs. However, there is no credit-building potential, there are only rewards in some cases, and you may face high fees.
Frequently Asked Questions
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Is Your Money Safe in a Credit Union?
Yes, a credit union can be as safe a place for your hard-earned funds as a bank. That’s because, just like banks, the vast majority of credit unions are federally insured, providing protection on up to $250,000 in deposits per individual per institution. So if your credit union fails, all of your deposits up to this threshold are safe.
Banks are protected via the Federal Deposit Insurance Corporation, or FDIC, while credit unions are protected by the NCUA, or National Credit Union Administration.
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What Is the Downside of a Credit Union?
The disadvantages to banking with a credit union are minimal. Some credit unions may not offer all of the products that you need or desire. Some very small credit unions may not offer a robust online or mobile customer interface. The key is simply to choose a credit union that offers a wide assortment of products, and especially those you find most important.
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Is It Better to Join a Bank or Credit Union?
That depends on what you're looking for in a financial institution. While banks and credit unions often offer the same types of products, banks may offer more or a greater variety of them. As membership organizations, credit unions in particular are known for their interest in helping their members achieve financial goals over the years. In the process, they may offer higher deposit rates and lower loan rates than banks. On the other hand, credit unions can be smaller than banks and lack the branch presence or ATM availability that you need. Banks don't require membership while credit unions typically do although typically, there's no fee (except for those who wish to join but aren't eligible).
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Is It Worth Being In a Credit Union?
It can be. Credit unions offer most of the accounts that banks offer. And they operate as nonprofit organizations that answer to their customer members (rather than shareholders). They are known for placing the focus on members and their communities, providing products and services people need, often at more attractive rates and lower costs than those available at banks. Their customer service is normally considered an advantage.
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Why Do People Prefer Banks Over Credit Unions?
Not everyone does. However, for those who do, it may be because banks can sometimes offer a greater number and variety of financial products and services. They might have relationships with other financial institutions that can benefit consumers. They can have more branches and an extensive network of ATMs, which can allow people to conduct transactions close to work or home. Banks can also have a stronger online presence and online banking capability, including high-quality mobile banking apps and options.
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What Is the Best Credit Union?
There’s no such thing as the “best” credit union for every person. However, it is possible to identify the banking features that matter most to you and match those up with the credit union that makes the most sense for your financial situation. Some of our top-rated credit unions are Blue Federal Credit Union, Liberty Federal Credit Union, Alliant Credit Union, and Hiway Credit Union.
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Which Credit Union Is Best for Auto Loans?
Credit unions are known for offering attractive interest rates on many different types of financing—auto loans included. PenFed and Consumers Credit Union are two of our highly-rated auto loan lenders. However, the interest rates that credit unions offer can change on a frequent basis.
It’s important to research and compare the best auto loan rates from multiple lenders—credit unions and others—anytime you’re in the market for a new auto loan. Shopping around for the best deal on a car loan has the potential to save you hundreds or even thousands of dollars over the life of your loan.
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Which Credit Union Has the Best Rates?
Whether you’re looking to earn the highest APY possible on your savings or to get the lowest interest rate available when you borrow money, it’s important to shop around. The credit unions with the best rates can vary from one financial product to another. Furthermore, just because one credit union offers the highest interest rates on 5-year CDs this month doesn’t mean they’ll have the highest 5-year CD rates available next month. The good news is you can rely on expert evaluations to make the research process easier to manage—see our picks for the best CD rates for more information.
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Do Credit Unions Build Credit?
Many credit unions offer financial products that have the ability to help you build your credit. Credit builder loans are one example of a type of credit-building account that may be available from certain credit unions and online lenders. Credit unions may also offer credit cards and other types of loans that could help you establish your credit history when you manage the account in a responsible manner.
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Do Credit Unions Check Your Credit?
Credit unions won’t check your credit report or score when you open a new deposit account, according to the credit bureau Experian. However, if you apply for financing through your credit union (e.g., for a credit card or loan), you should expect a credit check to occur.
Methodology
There are nearly 5,000 credit unions in the U.S., but the vast majority limit their customer base to a specific community, state, or region, or to a particular employee group. A little more than a hundred of them, however, make it possible to join no matter where you live or work. We started our research with these.
From there, we dug into the details on which of those credit unions pay the best rates on savings and CDs, offer the best checking account options, provide the broadest array of financial services for personal and business customers, and provide the easiest and cheapest paths to membership. We also prioritized credit unions that participate in the Co-Op Shared Branch network and therefore provide local banking access even to customers who do not live where the credit union has locations.
With this data in hand, we were then able to filter the best credit unions into our award categories above.
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