How to Join a Credit Union

Joining a credit union requires comparing different offerings, learning about membership qualifications, and funding your account. Unlike banks, which are open to the public, credit unions often have membership criteria, so not everyone can join.

Find out how to determine whether a credit union would be a good fit for you, and how to join one.

What Is a Credit Union?

Credit unions are not-for-profit institutions that provide savings and loan services. Unlike a bank, account holders (members) own the credit union, so a credit union is driven by member interest, not producing a profit.

Credit union checking or savings accounts are often called share accounts to indicate members’ financial share in the institution. Members of many credit unions can use a network of more than 30,000 ATMs throughout the United States and Canada. Credit unions offer many basic financial tools, including person-to-person payments, online bill pay, mobile apps, and online banking.

How to Join a Credit Union

Depending on the credit union’s criteria, joining could be straightforward or more involved. Here’s the basic process.

Step 1: Research Your Options

Identify what you want from a credit union, whether it is finding one with branches near your home for convenient in-person services or one with online services and competitive rates. 

Then, narrow your options. Investopedia’s Best Credit Unions list can provide a good starting point for comparing credit union offerings. For example, if you travel often and want to make in-person transactions, you may benefit by joining a credit union participating in the nationwide CO-OP shared branch network of over 5,300 credit unions.

Step 2: Find Information on Membership Requirements

Credit unions often have requirements for who can become a member, meaning you can join or vote on leadership. Each credit union has different criteria for becoming a member. Review the credit union’s website to find membership information.

Next, confirm whether you’re eligible to join the credit union. The credit union will describe field of membership requirements, which could include criteria such as: 

• Occupation: Such as military member, teacher, or employed by or retired from a specific business  
• Association: Being in a particular church; professional, civic, or fraternal group; or specific labor union
• Education: Students or alumni of a specific college, university, or school system
• Family: Being related to a current member 
• Region: Living, working, or attending school in a specific community or communities

Many credit unions offer an alternate way to join if you do not fit their criteria. For example, a credit union may allow anyone to join if they become a member of a specific nonprofit organization for a small fee. The credit union may pay any one-time membership fee—ranging from $5 to $25—to the nonprofit organization on your behalf, or you may need to pay this fee.

Step 3: Apply for Membership

You’ll often have an option of applying to join a credit union online, by mailed paper application, or in person. Make sure to have your legal name, address, date of birth, Social Security number, and other information on hand.

You’ll typically need to provide: 

• Your Social Security Number or Taxpayer Identification Number
• Government-issued ID such as a driver’s license or passport 
• Proof of address such as a utility bill or lease agreement
• Method for funding your new account (more on this below)
• Other eligibility documents such as a pay stub or school transcript

When you apply to join a credit union, the credit union may conduct a soft credit check or an inquiry into your banking history through ChexSystems when you open your account, which won’t affect your credit score.

If you have a troubled banking history, find out in advance whether the credit union offers accounts designed to provide you with basic services while preventing overdraft charges, often called “fresh start” or “second chance” accounts. They may charge extra service fees, but you may be able to upgrade to a standard account after a probationary period.

Step 4: Make a Deposit

Choose which type of accounts you’d like to open, such as savings, checking, or certificate of deposit (CD), and then make a deposit. Depending on the credit union, membership typically requires a minimum deposit of about $5 to $25 for a savings account, or share account.

A credit union may require you to have a minimum balance in your savings account, such as $10, $50, or $100. You may have a minimum balance requirement to earn a specified savings rate. 

Step 5: Read Your Account Disclosures and Agreement

After you’ve joined the credit union, make sure you fully understand the terms. Comparing terms should have been part of shopping for the right fit for a credit union for you, but you’ll want to review the terms again to be sure that you understand all the details.

Fine-print disclosures help you understand your new account and avoid unexpected charges. In particular, review your new account’s: 

• Fee schedules 
• Privacy policy
• Overdraft protection policy and opt-out
• Explanation of how dividends or interest-bearing accounts work

Credit unions usually prioritize member relationships, but they still may include charges and fees that are not obvious. Credit unions may charge fines on late credit card payments—but the average charge is under $25 vs. fees of $36 to $40 found at top credit card issuers.

Pros and Cons of Joining a Credit Union

Pros of Joining a Credit Union Explained

• Competitive savings rates: Credit unions often have better CD rates than banks.
• Low borrowing rates: Credit unions typically have lower interest rates on credit cards, some mortgage products, and car loans.
• Benefits: Credit unions may offer members discounts and/or cash back on services, car rentals, insurance, and online shopping. 
• Low or no fees: Credit unions typically don’t charge maintenance fees and may not require a minimum balance on checking accounts.
  

Cons of Joining a Credit Union Explained

• Membership process: Joining a credit union can entail a membership process if the credit union’s field of membership is narrow.
• Limited locations and hours: Credit union branches and ATMs likely won’t be as widespread or accessible as with national banking options, so you may need to conduct more business by phone or online. You may also have a hard time finding an international CO-OP ATM.

How to Choose a Credit Union

First, you’ll need to make sure that the credit union you choose will accept you as a member. Then, consider making sure it has some or all of the following benefits:

• Savings protection: Deposit insurance of up to $250,000 for your savings and checking accounts
• ATM access: Access to the CO-OP ATM network and ATM fee rebates
• Fees: No or low monthly fees for services
• Checking accounts: No account minimums and free checks
• Free financial planning: Budgeting, paying off debts, and other assistance with financial wellness
• A mobile app: To check balances and use mobile check deposit
• Tech integration: Methods to easily transfer funds or pay bills

For many potential members, a commitment to community contributions is also important, so you may want to review the credit union’s annual report and history of giving.

The Bottom Line

Joining a credit union can make sense if you want to benefit from a specific credit union’s higher CD interest rates, lower loan rates, and no-fee checking. But joining a specific credit union can be challenging because of the potential for membership requirements.

If you want to join a particular credit union due to great savings rates or another reason, but you don’t meet membership criteria, call to see if there’s another way you can qualify to be a member.