By Kiyosha Baird
If you’re looking for a bank that will partner with your family to grow and protect your child’s money, then a credit union is a great option. By understanding what a credit union is, how it differs from traditional banks, and the best credit union youth accounts, you’ll be able to decide if a credit union is right for your child.
Let’s get into it.
What is a Credit Union?
A credit union is a member-owned, not-for-profit bank that operates as a financial cooperative. Let’s look at each of these qualities in more detail.
Credit Union Pros
Credit Unions Are Member-Owned.
A credit union doesn’t have customers. It has members, and its members are its owners. This means that members can influence the credit union’s policies and focus. Since the credit union’s purpose is to serve its members, credit union banks offer more personal service while being more involved in the local community.
Credit Unions Operate As Financial Cooperatives.
A financial cooperative is a bank owned and operated by its members. Sometimes called a co-op, members pool their resources together to enable the bank to offer a variety of financial services and products. Examples include accounts such as savings, checking, and money market deposits, certificates of deposit (CDs), mortgages, auto loans, student loans, and credit cards.
Credit Unions Are Not-For-Profit Banks.
Because of their organizational structure, credit unions tend to have lower operating costs. They pass these savings onto their members in various ways, including lower banking fees and higher interest rates on deposit accounts.
Credit Union Cons
Credit Unions Have Membership Requirements
To join a credit union, you and your child will need to meet the membership eligibility requirements. Membership is generally based on some commonality, such as location or profession.
Credit Unions Have Fewer Branches and ATMs.
Because credit union banks tend to operate locally or regionally, they may have fewer branches and ATMs than other banking options. However, credit unions may expand their accessibility network through a shared branch network or ATM network.
Like any bank, credit unions have pros and cons. But how do they differ from traditional banks? Let’s explore this inquiry further.
What’s the Difference Between a Credit Union and a Bank?
There are several key differences between a credit union and a bank. Below are the highlights.
| Area | Credit Union | Traditional Bank |
| Business Structure | Not-for-Profit | For-Profit |
| Ownership | Members | Shareholders |
| Eligibility | Membership requirements | Open to Public |
| Deposit Accounts | Higher Interest Rate | Lower Interest Rate |
| Insurance | Insures up to $250,000 per share owner, per insured credit union, per account ownership category by the National Credit Union Administration (NCUA). | Insures up to $250,000 per depositor, per insured bank, per account ownership category by the Federal Deposit Insurance Corporation (FDIC). |
| Community Involvement | High Involvement | Low or No Involvement |
| Branches | Fewer Branches | More Branches |
| Technology | Less apps and other technology | More apps and other technology |
You’ve decided that opening a savings account for your child at a credit union is the right path for you. You may be wondering what you should look for in a youth savings account. And rightly so. Up next is the answer.
6 Traits to Look For in Credit Union Youth Accounts
No Fees
Fees can reduce overall savings. Fees come in many forms, from monthly maintenance fees to overdraft fees. Look for accounts that offer no fees.
No Minimum Balance
Some accounts require a minimum balance to remain open. Opening an account that does not have this requirement will facilitate and allow your child more flexibility as they build their savings.
High-Interest Rate
One advantage of depositing savings at a credit union bank is that they earn interest. The higher the interest rate, the more your child earns.
Easy Accessibility
Convenience is important when it comes to banking. Having a branch or ATM nearby makes banking so much easier. Also, having access to digital tools, like online banking, will help you track and manage your savings. Look for youth accounts with these features.
Savings Rewards and Educational Features
Some credit unions offer a savings account as part of a broader financial program. This program can include rewards and potential matching opportunities as children reach savings goals, and educational opportunities such as financial literacy training. Don’t miss out on these great incentives if offered.
Best Credit Union Youth Accounts
Here is a list of the best credit unions that offer youth savings accounts for children under 18.
| State | Credit Union | City |
| Alabama | All In Credit Union | Daleville |
| Alaska | Global Credit Union | Anchorage |
| Arizona | Vantage West Credit Union | Tucson |
| Arkansas | Arkansas Federal Credit Union | Little Rock |
| California | SchoolsFirst Federal Credit Union | Santa Ana |
| Colorado | Ent Credit Union | Colorado Springs |
| Connecticut | Sikorsky Financial Credit Union | Stratford |
| Delaware | Del-one Federal Credit Union | Dover |
| Florida | Suncoast Credit Union | Tampa |
| Georgia | Delta Community Credit Union | Atlanta |
| Hawaii | HawaiiUSA Federal Credit Union | Honolulu |
| Idaho | Idaho Central Credit Union | Chubbuck |
| Illinois | Alliant Credit Union | Chicago |
| Indiana | Intera Credit Union | Goshen |
| Iowa | Veridian Credit Union | Waterloo |
| Kansas | Meritrust Credit Union | Wichita |
| Kentucky | Commonwealth | Frankfort |
| Louisiana | Neighbors Federal Credit Union | Baton Rouge |
| Maine | Maine State Credit Union | Augusta |
| Maryland | AGPFCU | Aberdeen |
| Massachusetts | Santo Christo Federal Credit Union | Fall River |
| Michigan | ELGA Credit Union | Grand Blanc |
| Minnesota | Ideal Credit Union | Woodbury |
| Mississippi | Singing River Federal Credit Union | Moss Point |
| Missouri | CommunityAmerica Credit Union | Kansas City |
| Montana | Altana Federal Credit Union | Billings |
| Nebraska | Liberty First Credit Union | Lincoln |
| Nevada | Clark County Credit Union | Las Vegas |
| New Hampshire | Holy Rosary Credit Union | Rochester |
| New Mexico | Sandia Area Federal Credit Union | Albuquerque |
| New Jersey | Local 1233 Federal Credit Union | Newark |
| New York | Corning Credit Union | Corning |
| North Carolina | Local Government Federal Credit Union | Raleigh |
| North Dakota | Dakota Plains Credit Union | Edgeley |
| Ohio | CSE Federal Credit Union | Canton |
| Oklahoma | WEOKIE Federal Credit Union | Oklahoma City |
| Oregon | Mid Oregon Credit Union | Bend |
| Pennsylvania | American Heritage Federal Credit Union | Philadelphia |
| Rhode Island | Navigant Credit Union | Smithfield |
| South Carolina | South Carolina Federal Credit Union | North Charleston |
| South Dakota | Black Hills Federal Credit Union | Rapid City |
| Tennessee | Tennessee Valley Federal Credit Union | Chattanooga |
| Texas | Security Service Federal Credit Union | San Antonio |
| Utah | Goldenwest Credit Union | Ogden |
| Vermont | 802 Credit Union | Barre |
| Virginia | Langley Federal Credit Union | Newport News |
| Washington | Washington State Employees Credit Union (WSECU) | Olympia |
| West Virginia | Raleigh County Educators Federal Credit Union | Beckley |
| Wisconsin | Educators Credit Union | Racine |
| Wyoming | UnioWyo Federal Credit Union | Laramie |
What To Do If You Do If Your City Isn’t Listed
If you don’t see a credit union listed for your city above, don’t worry. There is likely a credit union that services your geographical area or profession. A quick Google search should do the trick to connect you with just the right one.
Or, if you prefer, you could consider PedFed Credit Union, a quality credit union that offers membership to everyone regardless of location or profession.
How Do You Become a Member of a Credit Union?
To join a credit union, you and your child will need to open a join account, as minors cannot open an account on their own.
To open an account, you both must also meet the membership eligibility requirements. Eligibility requirements are generally broad in nature and require members to either
- live within a certain geographical area, such as a state or county,
- work in a particular profession, such as teaching or the military, or
- make a small donation to a foundation.
Fortunately, credit unions are available in every state in America. Making it easier to open an account.
Conclusion
Credit unions have pros and cons. One major reason people choose to bank with a credit union is the low fees and favorable interest rates.
Credit Unions also differ from banks in structure and mission, enabling them to provide more personal, community-based service. These qualities make credit unions are great place to open a savings account for your child.
Take the next step. Begin experiencing the benefits by applying for membership with your local credit union today.