– How a Credit Union Can Set Your Children Up for Financial Success
Credit unions offer an array of financial products and services to help you reach your goals at low or even no cost. When it comes to youth banking at a credit union, you’ll get financial education and tools to empower younger account holders for success. In this blog, we will discuss how youth banking at a credit union can help young people get started on a path toward financial wellness.
What is a Credit Union?
A credit union is a not-for-profit financial cooperative that exists to help people and their communities by offering financial products and services. To join, you must meet membership eligibility. This could be a geographic requirement, such as living or working in a certain area, or an employer requirement, such as working for a specific company or being a family member of someone who works there.
Credit unions exist to help people and their communities. They tend to offer their members higher rates on deposits and lower rates on borrowing money. Depending on their asset size, they may also offer college scholarships, free financial education resources or sponsorships and partnerships in community events.
How Do Credit Unions Differ From Banks?
Credit unions and banks provide very similar financial products and services but their structures determine who benefits from these services, according to Nerdwallet.com. Banks are for-profit companies that serve customers and are focused on earning profits for their stockholders. Credit unions are member-owned and are focused on sharing their profits with members and local communities.
Banks tend to have more fees associated with account maintenance and charge higher interest rates on loans. Alternatively, credit unions offer fewer or no fees for similar services. Banks have a paid board of directors while credit unions have a volunteer board. Also, every credit union member has a vote in their board elections while bank customers do not.
One area where both are similar is being federally insured. Credit union deposit accounts are insured up to $250,000 by the National Credit Union Administration (NCUA). Bank deposit accounts are insured to the same amount by the Federal Deposit Insurance Corp. (FDIC). Both insurance groups protect individuals' deposit accounts in case their financial institution shut down.
Credit Unions Give Back to Their Communities
Credit unions' not-for-profit status means they give back to their communities in different ways. Depending on where they serve, there may be multiple opportunities to see your local credit union in action helping people. Visit your credit union’s website to view all the resources they have available to help you with your financial wellness.
Credit Unions and Young People
Credit unions are a great way to get young people started on the basics of money management so they’ll make smart money decisions like teenagers and adults. Parents and guardians can open youth accounts for them and give them a taste of financial responsibility with a debit card, usually at age 13 or 14. Youth savings accounts are also a popular tool to teach them to save birthday and holiday money for future goals.
Today’s tech-savvy youth will also benefit from a credit union’s digital banking system, which typically includes a mobile app. Travis Credit Union’s mobile app lets members not only view all their account information but also gives access to tools to check credit, view financial education courses, track spending and more.
Once they’ve turned 18, youth accounts can be converted into regular accounts, giving young adults full access and control. This is important for their financial growth, especially when they’ve started working or attending college. This is a good time for them to open a checking account to manage their funds or apply for a credit card to build their credit history for future borrowing.
How Can TCU Help?
Travis Credit Union offers an array of financial products and services that can help youth learn about money and how a credit union can help them on their financial journey. TCU’s free Knowledge Base online platform covers topics such as what goes into building and maintaining a credit score, the basics of borrowing, how to manage finances, how to buy a car and so much more.
TCU’s Access Checking Account can help young people over 14 manage their funds. With a debit card and no overdraft fees, they’ll gain confidence and peace of mind that they are in control of their money.
In the community, TCU’s Generation Wealth program can help teens and young adults learn important budgeting skills they’ll need as they get older. Visit Traviscu.org today to learn more about the many resources available to youth as a credit union member.