Using a credit union for business banking might not be your first thought when you start a business, but that doesn’t mean it’s a bad idea.. Credit unions work very similarly to banks, with one key difference – their account holders, not shareholders own them.
That means that credit unions work for the benefit of their customers, including their business customers.
Best Credit Unions for Business Banking
These are the top credit unions for business checking.
|Navy Federal Credit Union||Active, retired, and veterans of the armed forces; Family members of military members; Department of Defense civilians||Unlimited electronic deposits; Interest available for certain accounts; Business lending services||Navy Federal Credit Union (NFCU) has three different business checking accounts. You can only open one if you’re related to the military in some way, but they offer many benefits, including interest on your account balance and fee-free transactions. You can also use NFCU for lending services. With NFCU financing, you can grow your business more quickly.|
|Digital Federal Credit Union (DCU)||Based on employment or community residence; Available to all others who donate to a participating organization||Fee-free checking; Interest on your balance; 20 free deposits each day||DCU has a relatively small footprint, mostly operating in the northeast. However, it has a huge ATM network across the country and offers ATM fee rebates depending on your credit union membership level.|
|Consumers Credit Union||Make a $5 donation to the Consumers Cooperative Association||Up to 300 free transactions; Interest on your account balance; Lending services||Consumers Credit Union is based in Illinois but lets anyone join so long as they make a small donation to the Consumer Cooperative Association. That makes it one of the easiest credit unions to join. CCU has four business checking accounts to choose from, each offering a different balance of maintenance fees, fee-free transactions, and other perks. CCU also offers a variety of business loans.|
|Suncoast Credit Union||Live work, attend school, or worship in certain Florida counties||No monthly maintenance fee on some accounts; Up to 300 free transactions per month; Business lending services; Business insurance||Suncoast Credit Union is focused on the state of Florida, offering a compelling business checking account for its members. Members can choose from two accounts, one with no monthly fee and one with more free transactions per month. On top of checking services, you can use the credit union for business lending and business insurance services.|
What is a Credit Union?
A credit union is a financial institution that works very similarly to a bank. It offers checking and savings accounts, loans, and other financial services.
What makes them different is that they are member-owned nonprofits. Where banks are often owned by a group of shareholders and work to generate a profit for those owners, credit unions are owned by their members. Typically, to open any account at a credit union, you need to put a few dollars in a share savings account to establish your ownership in the credit union.
Because credit unions are nonprofits and owned by their customers, they work in the interest of their account holders. That often means better interest rates, lower fees, and better service than at a bank.
One unique aspect of credit unions is that they must have eligibility requirements for membership. Some have eligibility requirements regarding your employment or where you live. Others make it very easy to become eligible, such as by allowing anyone who makes a small donation to a specific charity able to open an account.
Features and Drawbacks of Credit Unions for Business Banking
Using a credit union for business banking has pros and cons. You need to consider both before you open an account.
- Nonprofit. Credit unions are nonprofits and are owned by their account holders. You can feel more confident that a credit union will operate in your best interest than you can with a bank.
- Better rates. Many credit unions offer better interest rates, both on deposits and on loans, than banks. That can help your business save money.
- Fewer fees. Another source of savings for your business is that many credit unions keep fees lower than banks.
- Flexibility and service. Credit unions are smaller, community institutions. They can often provide better service and be more flexible than bans. If you need something for your business, like a specific banking service or a loan, a credit union might be able to be more flexible when it comes to helping you out.
- Smaller footprint. Credit unions are much smaller than banks. They’re usually highly local or regional institutions, so you might not be able to use one if you plan to expand significantly. You may also have a limited number of branches or ATMs to visit.
- Technology. Because credit unions are smaller, they may not have the same technology infrastructure as large banks. That can mean outdated mobile apps or websites.
- Eligibility requirements. You might not be eligible to open an account at the best business credit unions. Banks, on the other hand, don’t limit eligibility.
How to Choose Credit Union for Business Accounts?
To choose the best credit union for your business checking account, consider the following.
- Eligibility. The first thing to think about is eligibility. You have to meet the requirements to open an account at a credit union, so there’s no reason to look at accounts you’re not eligible for.
- Fees. Consider how much you’ll pay to use the account. That includes both maintenance fees and other costs such as transaction fees for frequent deposits.
- Interest rates. Many credit unions offer interest on business checking accounts. If you want to earn some extra cash, try to find one with a high interest rate.
- Online services. Many credit unions have limited online services compared to large banks, but that’s not true of all of them. If you do a lot of your business online, look for a credit union that prioritizes its online service.
- Other services. Getting a great business checking account is important, but don’t forget your business’s other needs. If you can find a credit union that also does business lending or insurance, that can make your life much easier and let you keep all of your business finances in one place.
A credit union might not be the first place you look for a business checking account, but there are lots of benefits to using one for your company. They often offer lower fees, better interest rates, and greater care and service for your company. Consider a few different options and try to choose the credit union that best fits your business’s needs.
Frequently Asked Questions
1. Is your money safe in a credit union?
Yes, your money is safe at a credit union. The National Credit Union Administration (NCUA) offers insurance much like the FDIC.
2. Do credit unions give interest on checking accounts?
Yes, many credit unions do pay interest on checking account balances.
3. Why use a credit union rather than a bank for business banking?
Credit unions have many advantages over banks for business checking, including better customer service, lower fees, and the ability to earn interest.
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