Best Credit Unions - NerdWallet
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NerdWallet’s Best Credit Unions

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NerdWallet’s Best Credit Unions

Whether you’re chasing higher rates on deposits or just looking to move away from traditional banks, there’s probably a credit union out there for you. Here are some of NerdWallet’s top picks.

Easiest to join

To be eligible for membership in many credit unions, you have to live or work in a particular region or have a certain employer. Some, though, have requirements that make it easier for more consumers to join. Two great examples:

Connexus Credit Union: Taking advantage of a rule that lets credit unions link membership qualifications to specific nonprofit groups, Connexus Credit Union founded its own charity. So, by joining the nonprofit Connexus Association — which has donated more than $150,000 to organizations like the United Way and Big Brothers Big Sisters — you become eligible to join the Connexus Credit Union.

The catch? To join the association, you pay … $5. One time.

Navy Federal Credit Union: This credit union has more than 5 million members — but it estimates that more than 6 million other people are eligible for membership but have not joined. Here’s why those numbers are so big: If you work for the Department of Defense, have served in any branch of the U.S. armed forces or have retired from the DoD or the military, you’re eligible.

Further, like most credit unions, Navy Federal allows everyone in a member’s immediate family to join. But it also permits family members of those merely eligible for membership to join. So if you have a Marine for a mom and she does her banking elsewhere, you can still join Navy Federal, with her as a sponsor. It’s enough to make a person dizzy, but Navy Federal might just be worth checking out if your family has any military ties.

Best interest checking accounts

Technically called “share draft” accounts at credit unions, these work just like checking accounts at traditional banks. But because credit unions are not-for-profits, they can often offer higher rates of return than banks.

Like traditional banks, some credit unions also offer attractive incentives to get new checking customers in the door.

Consumers Credit Union: This credit union has an affiliated organization that anyone can join for a one-time $5 fee, similar in that way to the Connexus group. As a member of the Consumers Cooperative Association, you’re eligible to join the credit union. Although the association doesn’t have the same track record of charitable giving that the Connexus Association does, Consumers Credit Union offers a distinct benefit: an exceptional annual percentage yield, or APY, of 5.09% on checking balances of up to $20,000, provided you meet certain spending and other requirements.

Southwest Airlines Federal Credit Union: Southwest Airlines FCU offers members up to a 4% return on their LUV Reward Checking accounts. And eligibility requirements are a little looser than you might guess: Southwest employees are eligible, but so are their family members, as well as employees of over 150 other organizations. Check with your employer to see whether it offer Southwest credit-union eligibility.

Best high-yield savings account: Alliant Credit Union

It’s not a great time to earn high returns on “regular share” (that is, savings) accounts, because banks and credit unions themselves aren’t earning much by lending the funds they hold. If and when lending rates rise from their near-historic lows, returns on savings may climb, too. That said, among credit unions without a strong geographical requirement for membership, Alliant Credit Union offers one of the highest returns on savings, at an APY of 0.95%. Technology lovers take note: Alliant is also NerdWallet’s pick for best mobile experience among credit unions.

Best for branch lovers: American Airlines Credit Union

If you tend to spend most of your time in the city where you live and work, finding a local credit union or one with a strong footprint in your area might serve you best. Many credit unions participate in branch- and ATM-sharing networks to provide their members with broad access to funds and services.

For those who travel often but prefer to do their banking with their own financial services provider, American Airlines Credit Union may be a great option. It has 43 branches scattered throughout the U.S., many of them at airports — and quite a few in the Dallas-Fort Worth area, near the carrier’s corporate headquarters. The credit union is open not just to American employees and their family members, but also to those who work for other airlines, airports and many other industry organizations.

For many consumers, joining a credit union can be a good alternative to using a traditional bank. From excellent rates to the pleasure of supporting a not-for-profit cooperative, the benefits of credit union membership make them worth a try.

Methodology

To generate an initial comparison set for each category, NerdWallet reviewed quarterly data on all federally insured credit unions from the National Credit Union Administration, or NCUA, a government regulator. Qualitative factors such as membership eligibility criteria and individual accounts’ features were reviewed to develop recommendations.

Devan Goldstein is a staff writer at NerdWallet, a personal finance website. Email: dgoldstein@nerdwallet.com. Twitter: @devan.

Published Aug. 11, 2015.


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