Best Credit Unions for an Alternative to Traditional Banks

If you’re looking to open a new bank account or exploring options to switch your current accounts, you may have run into a few credit unions. Credit unions are often excellent places to open checking and savings accounts, with the same protections and options as big banks, often with better terms.
In this guide, I’ll quickly explain how credit unions work, run you through the top 9 options on the marketplace, explore FAQs about credit unions, and run you through the pros and cons of this type of financial institution.

What are credit unions?

Credit unions are not-for-profit financial institutions with members, rather than customers. Unlike traditional banks which are for-profit, credit unions work to serve their members, with small credit unions focusing on bettering communities. Credit unions typically offer the same services as larger banks, but with better interest rates and terms.
At a traditional bank, your money is insured by the FDIC (federal deposit insurance corporation). If you bank at a credit union, your money is also federal insured through the NCUA (national credit union administration). The NCUA not only insures deposits, but they also regulate credit unions and protect the members and owners of credit unions.

Overview of the 9 best credit unions

Credit UnionBest for
Navy FederalBest for military members and their families
AlliantBest for ATM access across the country
Boeing EmployeesBest for Boeing employees and family members
ConsumersBest for anyone looking for a high-interest checking account
American FirstBest for free, interest-earning checking
ConnexusBest for anyone who uses a debit card often (more than 15 times per month)
Golden 1Best for California residents
Pentagon FederalBest for high-interest savings accounts
BlueBest for anyone looking for a national credit union with no limits on membership
Navy Federal Credit Union is the largest credit union in the country with over $111 billion in assets. This credit union was first founded in 1933 to help Navy employees reach their financial goals.
Navy Federal’s membership has since grown to include all military personnel, veterans, and their families. To qualify for a Navy Federal membership, you must meet one of the below requirements:
  • Active duty member of the military, retired military personnel, or military veteran
  • Parent, grandparent, sibling, spouse, child, grandchild, or household member of the above military member
  • Department of defense employees
  • Navy Federal Credit Union Checking and Savings Options
Navy Federal currently offers five different checking accounts for members:
  • Free Active Duty Checking - Best for active duty or retired military members. This account includes free ATM rebates (up to $240 per year), no monthly fee with qualifying deposits, no minimum balance requirements, and 0.05% APY on deposits. It also provides access to military paychecks a day earlier than other credit unions and banks.
  • Free Easy Checking - Best for every day checking services. This account has no monthly fees with qualifying deposits, no minimum balance requirements, ATM rebates (up to $120 per year), overdraft protection, and 0.05% APY.
  • Free Campus Checking - Best for military students and family members between 14-24. This account has no monthly fee, no minimum balance requirements, ATM fee rebates (up to $120 per year), and 0.05% APY.
  • Free Everyday Checking - Best for all eligible members looking for basic checking services. This account has no monthly fees, no minimum balance requirements, and 0.05% APY.
  • Flagship Checking - Best for high balance checking accounts. This account has a $10 monthly fee that is waived if your balance is $1,500 or higher, free ATM rebates (up to $120 per year), and a tiered .35% to 0.45% APY depending on your balance.
Navy Federal offers one primary savings account, their Share Savings Account. This account has no monthly fees, requires a $5 deposit, and has a 0.25% APY. While this isn’t the lowest rate on the market, if earning interest is your primary goal, you can find free online savings accounts with much higher APYs.

Additional service offerings include:

  • CDs
  • Money market accounts
  • Retirement savings
  • Education savings
  • Credit cards
  • Personal loans
  • Student loans
  • Auto loans
  • Mortgages
  • Home equity loans
Navy Federal Credit Union has 247+ branches in 34 states and 504 proprietary ATMs available worldwide. They also have a network of over 30,000 free ATMs across the country.
You can learn more at www.navyfederal.org.

Alliant

Alliant Credit Union is a top choice for anyone looking to move their banking services. This credit union is headquartered in Chicago but has branch locations and deposit ATMs across the country.

Alliant Membership Requirements

To become a member of Alliant Credit Union, you must meet one of the five below requirements:
  • Current or retired employee from one of the numerous businesses and organizations partnered with Alliant
  • Immediate family member or spouse/domestic partner of a current Alliant member
  • Live or work within one of the communities surrounding Alliant’s headquarters in Chicago
  • Member of a qualifying organization
  • Become a member of Foster Care to Success and make a $5 donation
  • Alliant Credit Union Checking and Savings Options

Alliant account types

Alliant offers a high-yield checking account with no monthly fees and no minimum balance or deposit requirements. You’ll also have access to 80,000 fee-free ATMs and receive $20 per month in ATM rebates if you use an out-of-network ATM. This checking account earns up to .25% APY if you meet two minimum deposit requirements:
  • Sign up for electronic statements
  • Make at least one deposit per month (direct deposit, mobile deposit, bank transfer, check deposit, etc)
Alliant also offers a checking account for teens under 18.
Alliant’s primary savings account is a high-yield savings option that will earn you 0.55% APY. If you open just a savings account (no checking account), you’ll be issued a debit card to access your funds through Alliant ATMs. This savings account also has no monthly fee if you enroll in electronic statements and requires only a $5 deposit.
If you’re saving for a particular goal, you can also open a supplemental savings account with Alliant with the same terms that you can nickname as needed (house fund, emergency savings, kids’ college fund, etc). You can also open a kids savings account for minors with the same terms.

Additional services offered include:

  • CDs
  • Retirement savings
  • Credit cards
  • Personal loans
  • Student loans
  • Auto loans
  • Mortgages
  • Home equity loans
Alliant has five branch locations and over 80,000 free ATMs across the country.
You can learn more at www.alliantcreditunion.org.

Boeing Employees Credit Union (BECU)

BECU was founded in 1935 by a group of Boeing employees. For decades membership was limited to just employees, but over time branched out to include other members. Today, Boeing Employees is the fourth largest credit union in the country.

Boeing Employees Membership Requirements

In order to qualify as a member at BECU, you must answer yes to one of these four questions:
  • Do you live in the state of Washington or select counties in Oregon (Benton, Clackamas, Columbia, Lane, Linn, Marion, Multnomah, Polk, Washington and Yamhill counties) or Idaho (Benewah, Bonner, Boundary, Clearwater, Idaho, Kootenai, Latah, Lewis, Nez Perce, and Shoshone counties)?
  • Do you work for BECU, Boeing, or another credit union (or do you have a family member who does)?
  • Are you in any way associated with the University of Washington Alumni Association, Washington State University Alumni Association, NW Credit Union Foundation, or KEXP?
  • Are you a business owner associated with the above foundations or located in the areas from question one?
If you answer yes to one of the above, you’re eligible to apply for Boeing Employees membership.

Boeing account types

Boeing Employees offers three checking account options:
  • Free Checking - Best for everyday checking. There’s no monthly fee, no minimum balance requirements, access to your FICO score, and online banking options.
  • BECU Checking - Best for anyone looking to earn interest on checking deposits. There’s no minimum balance, no monthly fees, and 0.01% to 1% APY options (1% APY applies up to $500).
  • Teen Checking - Best for minors and students. There’s no monthly fees, no minimum balance requirements, and 0.01% interest earned on deposits.
Boeing Employees savings account options include:
  • BECU Savings - No monthly fees, no balance requirements, and 1.00% APY on your first $500 (0.02% after).
  • Youth Banking - This early saver account is ideal for kids and minors. You’ll earn 2.02% APY on the first $500, and 0.02% afterward. There are no monthly fees or minimum balance requirements.

Additional services offered include:

  • CDs
  • Money market accounts
  • Retirement savings
  • Credit cards
  • Personal loans
  • Auto loans
  • Mortgages
  • Home equity loans
  • Investment services
  • Business banking
Boeing Employees has 50 branch locations throughout Washington and South Carolina. They also offer access to over 30,000 in-network ATMs.
You can learn more at www.becu.org.

Consumers

Consumers Credit Union has been serving its members for over 90 years throughout the state of Illinois. Thanks to digital banking, Consumers is now open to even more members throughout the country.

Consumers Membership Requirements

In order to become a member of Consumers Credit Union, you simply need to make a $5 donation to the credit union’s sponsor, Consumers Cooperative Association. You’ll also need to maintain at least a $5 balance in your checking or savings accounts.

Consumers account types

Consumers offers three main checking account options:
  • Free Checking - Enjoy no minimum balance requirements ($5 to open), no monthly fees, early direct deposit features, unlimited check writing, and mobile deposit options.
  • Rewards Checking - Enjoy 2.09% APY - 4.09% APY on deposits on balances up to $10,000 (requirements must be met), no monthly fees, no minimum requirements, early direct deposit, and unlimited check writing options.
  • Student Checking - a no-check checking account for minors with debit card access ($310 daily limit), early direct deposit, and mobile banking.
Consumers savings account options include:
  • Membership Share/Savings Account - Enjoy basic savings features including a low minimum requirement ($5), no monthly fees, competitive interest rates, and mobile banking features.
  • Smart Saver - Enjoy up to 1.50% APY if you have a Consumers checking account, deposit between $50 to $1,000 per month, direct or mobile deposit $500 into your checking account each month, and enroll in electronic statements (enjoy 0.25% APY without meeting these criteria).

Additional services offered include:

  • Money market accounts
  • Holiday savings accounts
  • Retirement savings
  • Credit cards
  • Personal loans
  • Auto loans
  • Mortgages
  • Home equity loans
Consumers has 11 locations in Illinois and offers access to over 30,000 free ATMs and 5,000 shared branches across the country.
You can learn more at www.myconsumers.org.

America First

America First Credit Union was formed in Salt Lake City, Utah in 1939. This credit union is open to Utah, Arizona, Nevada, New Mexico, Oregon, and Idaho residents with both online and in-branch banking options. In 2016, America First Credit Union merged with Altier Credit Union to expand its branch locations in Arizona.

America First Membership Requirements

You can become a member of America First Credit Union if you live or work in select counties in Utah, Arizona, Nevada, New Mexico, Oregon, or Idaho. You can find a full map with all qualifying counties in each state here.

America First account types

America First offers members one free checking account option with no monthly fee, no balance requirements, and free online bill pay. This account allows members to begin accruing 0.05% interest on checking account balances over $500. They also offer a money market checking account that offers tiered interest starting at 0.05% on balances over $2,000 (you’ll need $10,000 to open a money market checking account).
The primary savings account available at America First is their share savings account, which can be opened with just $1 in deposits. This savings account has no fees and allows you to start earning 0.05% APY on balances over $1. They also have a money market savings account with APYs up to 0.15%.

Additional services offered include:

  • Money market accounts
  • Health savings accounts
  • Retirement savings
  • Credit cards
  • Personal loans
  • Auto loans
  • Mortgages
  • Home equity loans
America First Credit Union has 129 branches in 4 states across 64 cities. They offer access to ATMs near their branches as well as co-op ATMs (a full list is not disclosed online).
You can learn more at www.americafirst.com.

Connexus

Connexus Credit Union is a national financial institution that works with over 378,466 members across every state in the U.S. They offer 24/7 digital banking and access to in-branch and shared branch banking services.

Connexus Membership Requirements

Connexus Credit Union has many different paths to membership including belong to certain groups and businesses, living in certain areas, or being the family member or spouse of someone in either category (full list here). However, if you don’t meet the above criteria, you can become a member by making a $5 donation to the Connexus Association.

Connexus account types

Connexus offers a high-yield checking account that has no monthly fee, no minimum deposit requirements, and no balance requirements. If you make 15 debit card purchases or spend $400 in debit card purchases each month and enroll in e-statements, you’ll be able to earn 1.75% APY on your checking account balance. Teenagers can earn up to 2% APY.
Connexus also offers a savings account for members that yields 0.25% APY, has no fees, and comes with a debit card. You’ll need to maintain at least a $100 balance to earn this APY and must keep at least $5 in your account.

Additional services offered include:

  • Money market accounts
  • Health savings accounts
  • Retirement savings
  • Credit cards
  • Personal loans
  • Auto loans
  • Student loans
  • Mortgages
  • Home equity loans
Connexus branches can be found in Wisconsin, Minnesota, Ohio, and New Hampshire, and also has over 6,000 shared branches across the country. Members have access to over 54,000 in-network ATMs.
You can learn more at www.connexuscu.org.

Golden 1

Formed in Sacramento, California in 1933, Golden 1 is the leading credit union in California with over one million members. Golden 1 offers both in-branch and online banking services to its members.

Golden 1 Membership Requirements

You can become a member of Golden 1 Credit Union if you are a resident of California. There are no additional requirements.

Golden 1 options

Golden 1 offers five different checking account options:
  • Free Checking - Basic checking option for anyone looking for no fees and access to online banking.
  • Premium Checking - Interest earning checking account for anyone who keeps more than $1,000 in their checking account.
  • New Generation Checking - Teen checking account with no fees.
  • Freedom Checking - Designed for teens 16-17 who want to be able to withdraw and deposit money without a parent or guardian.
  • Student Checking - Ideal for college students looking for basic checking options.
Golden 1 Credit Union has many different savings account options including:
  • Regular Savings - Ideal for anyone looking for a free, basic savings with tiered interest rates (0.05% to 0.08% APY).
  • Additional Savings - Ideal for anyone who needs a separate savings account for targeted savings goals.
  • Flex Savings - Designed for those savings for special occasions, like a wedding or vacation (0.08% APY).
  • Coverdell Education Savings - Offers tax advantages for those saving for college expenses.

Additional services offered include:

  • Money market accounts
  • Holiday savings accounts
  • Retirement savings
  • Credit cards
  • Personal loans
  • Auto loans
  • Mortgages
  • Home equity loans
Golden 1 has 70 branches across California and 240 ATMs (plus 30,000 in-network ATMs country-wide).
You can learn more at www.golden1.com.

Pentagon Federal

Pentagon Federal Credit Union (PenFed) was first formed in 1935 and today serves more than 2 million members across all 50 states, Washington D.C., Guam, Puerto Rico, and Okinawa. This credit union is well known for its home loans (they’re an Equal Housing member), but also provides free banking services.

Pentagon Federal Membership Requirements

PenFed originally opened as a credit union serving military members and government employees, but today is available for anyone to join. In order to join, you must be a U.S. resident and must fund your banking account with at least $5.

Pentagon Federal account types

PenFed offers one primary checking option, their Access America Checking account. This account can earn up to 0.40% APY, is free if you direct deposit $500 or more per month or maintain a $500 balance, and offers access to an overdraft line of credit for extra protection.
PenFed offers two main savings account options:
  • Regular Savings - Best basic savings option used for establishing your membership at PenFed.
  • Premium Online Savings - Best high-yield savings option with APY up to 0.60% and no monthly fees.

Additional services offered include:

  • Money market accounts
  • CDs
  • Retirement savings
  • Credit cards
  • Personal loans
  • Student loan refinancing
  • Auto loans
  • Mortgages
  • Home equity loans
PenFed has 45 branch locations in 13 states and 35 cities across the U.S. and provides access to more than 55,000 ATMs across the country.
You can learn more at www.penfed.org.

Blue Credit Union

Blue Credit Union was first formed in 2016 when Warren Federal Credit Union and Community Financial Credit Union first merged. Today, Blue has over 98,000 members across the world.

Blue Membership Requirements

You can become a Blue Credit Union member in four different ways:
  • Employer - you can join if your employer is part of Blue’s network.
  • Family - you can join if a family member is a member of Blue.
  • Military - you can join if you’re an F.E. Warren Air Force Base military member, employee, or civilian or if you serve in the Armed Forces in Wyoming.
  • Donation - you can join by donating $5 to the Blue Foundation and $5 to fund your first account.

Blue account types

Blue offers four primary checking options for members:
  • Basic Checking - Best free option for everyday checking with no balance requirements.
  • Earn Five Checking - Best option for realizing small savings (up to $25 per month) on debit card purchases.
  • Extreme Checking - Best interest earning checking option (1.50% - 3.50% APY up to $15,000).
  • Youth Checking - Basic checking option for minors and youth under 23 years of age.
Blue offers two primary savings accounts for members:
  • Sky High Savings Account - Best basic savings account with a high-yield APY of 0.65% with no minimum balance requirements.
  • Accelerated Savings Account - Best savings option for small balances (5% APY up to $1,000 and 0.10% APY on all higher balances).

Additional services offered include:

  • Holiday savings accounts
  • Retirement savings
  • Credit cards
  • Personal loans
  • Holiday loans
  • Auto loans
  • Mortgages
  • Home equity loans
Blue Credit Union has 10 locations throughout Colorado and Wyoming and 30,000 fee-free ATMs throughout the country.
You can learn more at www.bluefcu.com.

Credit unions summary

Credit UnionTypeMinimum DepositMonthly FeeAPY%Locations
Navy FederalIn-branch and online$0$00.05% - 0.45% for checking; 0.25% for savings247+ branches, 504 proprietary ATMs , 30,000 fee-free ATMs
AlliantIn-branch and online$0$00.25% for checking, 0.55% for savings5 branches, 80,000 fee-free ATMs
Boeing EmployeesIn-branch and online$0$00.1% - 1% for checking, 0.02$ - 2.02% for savings (with limits)50 branch locations, 30,000 fee-free ATMs
ConsumersIn-branch and online$15$02.09% - 4.09% for checking (with limits), 0.25% - 1.50% for savings (with limits)11 branch locations (Illinois), 5,000 shared branches across the country, 30,000 fee-free ATMs
America FirstIn-branch and online$0$00.05% for checking and savings129 branch locations (across 4 states), ATM number not disclosed
ConnexusIn-branch and online$0$51.75% APY for checking 0.25 % APY for savings6,000 shared branch locations, 54,000 fee-free ATMs
Golden 1In-branch and online$0$00.15% APY for checking 0.08 APY for savings740 branch locations, 240 in-network ATMs, 30,000 fee-free ATMs
Pentagon FederalIn-branch and online$500 (to earn interest)$50.40% APY for checking; 0.60% APY for savings45 branch locations, 55,000 fee-free ATMs
BlueIn-branch and online$25$4.951.50% - 3.50% for savings, 5% APY up to $1,000 and 0.10% APY on all higher balances for savings10 branch locations, 30,000 fee-free ATMs

FAQs

What is a major advantage of using credit unions?
Credit unions usually offer better interest rates on savings accounts, credit cards, and loans, than traditional banks. Credit unions also often offer free accounts and have fewer fees than big banks.
What are the disadvantages of a credit union?
Credit unions often have fewer branch locations than most national banks and may only be located in certain parts of the country. They also may have access to fewer fee-free ATMs. Some credit unions also offer fewer banking products than traditional banks.
Are credit unions safer than banks?
Both credit unions and banks are insured by the federal government. Credit unions are insured by the National Credit Union Association (NCUA) and banks are insured by the Federal Deposit Insurance Corporation (FDIC).
Should I get a mortgage from a credit union?
Credit unions can often offer low rates on mortgages, but it’s important to shop around for the terms, rates, and payments that best fit your financial situation before deciding on a lender.
What is the largest credit union in the U.S.?
Navy Federal Credit Union is the largest credit union in the country.

Pros and cons of credit unions

Pros
  • Better rates. If you’re looking for high-interest rate savings accounts, credit unions often have much higher rates than national banks. Credit unions also tend to have lower mortgage and loan rates.
  • More flexible financing approvals. Credit unions are often able to work with you more closely when applying for a loan, mortgage, or credit card and can often customize a plan to get you approved for financing or improve your credit to boost your chances of approval.
  • Better financial education. Most credit unions offer financial literacy programs and information to help you better take control of your finances to reduce debt, improve your credit, or start meeting your savings goals.
Cons
  • Harder to access. Credit unions tend to have fewer locations across the country than national banks and may have limited ways to deposit cash if you do not live near a branch. This can make it hard to access your money or talk to a representative in person.
  • Stricter membership requirements. Credit unions all serve their members, but becoming a member may not be straightforward. Many credit unions limit membership to city, state, or regional areas, company employees, and different affiliate programs.

The bottom line

Credit unions can be an excellent alternative to big banks. While credit unions boast better rates and free checking and savings account options, it’s important to make sure you meet membership requirements before settling on a particular credit union. If in-person service is important to you, you’ll also want to make sure there’s a physical branch nearby.

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