How to Open a Credit Union Account

JeFreda R. Brown is a financial consultant, Certified Financial Education Instructor, and researcher who has assisted thousands of clients over a more than two-decade career. She is the CEO of Xaris Financial Enterprises and a course facilitator for Cornell University.

Businesswoman using phone and reviewing drawings in modern office" width="5120" height="3414" />

Credit unions are an excellent source for services such as savings accounts, checking accounts, and loans. They’re usually a safe bet for finding free checking, and interest rates are typically competitive. What’s more, these institutions are often local, so they keep your money (and their attention) in the same community in which you live.

But opening an account at a credit union can be intimidating to some, primarily because credit unions use different terminology. When “eligibility” and “membership” come up, people think the process is going to be complicated—but it’s easy to open an account. To do so, complete three steps:

1. Meet the eligibility requirement (this is usually easier than it sounds).
2. Make a small deposit (often $5 to $25) to become a member-owner.
3. Start using your account.

We’ll review each of those steps in more detail below.

Step 1: Determining Membership Eligibility

To join a credit union, you have to be a part of that credit union’s field of membership. That means you must have some kind of common bond with other members of the credit union.

It’s easy to find a credit union that you’re eligible to join. Some factors that might allow you to qualify include:

• Your employer has established a relationship with a credit union, and all employees are allowed to join.
• Community-based credit unions allow anybody who lives in a certain community (a city, state, or another geographic region) to join.
• Family members can open doors. You may be able to join a credit union based on a relative’s ability to meet membership requirements (even if that person isn’t a member).
• Your occupation, regardless of your employer, might help you qualify.

Joining an organization may also make you eligible for certain credit unions, which makes those credit unions open to just about anybody. You might need to make a modest donation, but some groups are free to join. For example, NASA Federal Credit union is clearly open to NASA employees and retirees—but anybody can join after getting a free membership to the National Space Society (NSS).

How to Find a Credit Union

If you need to find a credit union that you’re eligible to join, ask your co-workers, neighbors, and friends where they go. The National Credit Union Administration (NCUA), the government agency responsible for oversight of credit unions, also has a credit union search tool.

Step 2: Making an Initial Deposit

Once you find a credit union for which you're eligible, you can open an account. You can often do it all online, or you can visit a branch in person. To become a member of the credit union, you need to make a modest deposit, which represents your purchase of a share in the credit union. That deposit is often as small as $5 to $25.   You can make your deposit however you like, whether by cash, check, or by using a debit card or other electronic funds transfer from your other bank.

Note that for a number of credit unions, though not all, you need to leave a minimal amount of money in your account at all times. So, if your account balance is $10 and the share requirement is $5, you’ll really only have $5 available to spend.   The credit union prevents you from spending those funds, so keep that in mind as you plan your budget.

As with any financial account, you need to provide details about yourself, including:

• Social Security Number or Tax Identification Number
• Your physical address (you can also use a separate mailing address for correspondence)
• Valid identification, such as a driver’s license, passport, or other government-issued ID
• A reason why you’re eligible to join the credit union (“I work for XYZ Company” or “my mom is a member here”)  

Some credit unions check your credit and other databases such as ChexSystems, which tracks your history of bouncing checks, when opening an account. If you’ve had issues in the past, it’s wise to ask credit union staff about the requirements before you fill out an application. You might still be able to open an account that doesn’t come with a debit card or checks.

If you're opening business accounts, you need additional documentation. Bring your employer identification number (EIN) and any documents showing that your business organization exists (if you're incorporated in any way). Ask the credit union for full details, and get signatures from all required partners.  

Step 3: Using Your Account

That’s it—once you’re a member, you can use all of the services at the credit union.

• Set up direct deposit with your employer so that your earnings go directly to the credit union.
• Use online bill pay at your credit union to make payments electronically and keep a record of all transactions.
• Get your credit union’s app so that you can quickly check your balance and (if possible) make mobile check deposits.
• Set up alerts in your account (text or email) so that you know about any large withdrawals or low-balance situations.

Choosing a Credit Union

You can probably choose from several different credit unions locally and nationally. Pick a credit union that offers the products, services, and rates that are best for you.

As you compare options, don’t get too hung up on branch locations and hours. As long as your credit union is part of the shared branching network, you’ll have access to ATMs and branches of other credit unions nationwide. You can do most of what you need online or with your mobile device.

Federally insured credit unions are the safest credit unions—your money is equally as safe as money in an FDIC-insured bank account. However, other types of credit unions exist, and you might have a reason for choosing a less secure institution. If you do so, be sure you research and understand any limits on protection.

Frequently Asked Questions (FAQs)

What is a credit union?

A credit union is a financial institution that's owned by its members. As a credit union member, you can vote on issues related to the credit union like who should be on the board of directors. You typically must meet membership requirements, like living in a specific area or having a relative who is a member, to join a credit union.

Are credit unions nonprofits?

Credit unions are nonprofits, which means that they don't have to pay corporate income tax on earnings, and they only need to earn enough to cover daily operations. That allows them to offer better interest rates to their members than what you may find at banks.