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How To Provide a Major Financial Benefit to Your Employees
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Business New Haven
11/12/2001
By: Priscilla Searles
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Employers take a long, hard look at the bottom line when it comes to providing benefits for employees. But one benefit that is considered a definite plus by most employees is the availability of a credit union. The cost in terms of dollars and cents to the employer is a low, low, low…zero.
The biggest benefit of a credit union available through the employer is convenience for the employee. But what is a credit union? Like banks, credit unions offer personal financial services such as savings, checking and loans. But unlike banks, credit unions are not for-profit financial cooperatives.
Federal credit unions are owned and run by their members, who pool their funds to make loans to one another. Credit-union earnings are returned to members in the form of favorable dividends on savings, competitive rates on loans and lower (and fewer) fees. Its members elect the volunteer board that runs each credit union.
To join a credit union you must be eligible for membership. Each institution decides whom it will serve, with most credit unions organized to service people in a particular community, group or groups or employees or members of an organization or association.
Additional credit union types include community-development credit unions, which serve primarily low-income members in distressed and financially underserved areas. In recent years the National Credit Union Administration (NCUA) has emphasized the benefits these institutions provide to the many people who are often unserved by traditional banking institutions. NCUA also manages a revolving loan fund and provides technical assistance grants to low-income designated credit unions.
The last type is the corporate credit union, serving not individuals but acting as a credit union for credit unions. The 35 federally insured corporate credit unions across the county provide investment, liquidity and payment services for their member credit unions.
Credit unions make life easier for most employees. Benefits include payroll deduction for regular deposits or loan payments. Members can directly deposit payroll, Social Security or government deposits electronically for immediate credit - preferable to waiting days for checks to clear.
For those that find it difficult or impossible to save for vacations or holidays, credit unions also provide club accounts.
Services provided by credit unions parallel a bank's services, but doing one's financial business through the workplace does have its advantages in time saved as well as dollars. Most credit unions, for example, provide ATM cards and no-fee checking, with no monthly fee, and no per-check charges.
Credit unions provide a number of services to make saving a bit easier. These include command accounts or money-market accounts that pay a higher rate than regular savings, with check-writing, withdrawal and transfer options. Another option is share certificates, which require a low minimum balance to open. Individual retirement accounts are also offered by credit unions.
Credit unions provide a number of services to make saving a little easier. These include command accounts or money-market accounts that pay a higher rate than regular savings, as well as check-writing, withdrawal and transfer options. Share certificates and individual retirement accounts are also provided by credit unions.
For those who find themselves coming up short when it comes to buying a new car or replacing the living room carpet, loans through the credit union probably rank as the biggest plus for credit union members. Loans, whether a home equity line of credit or a student loan, are made as easy as possible by credit unions and are a major selling point for most people who belong to them.
Additional benefits provided by credit unions include group accident protection: life, auto, homeowners and other insurance programs that can be paid through payroll deduction. Legal services are also often available through credit unions for drawing up a will, assisting in a divorce or representing you in traffic court, as well as tax and notary services and cashier's and travelers checks.
Because credit unions are financial cooperatives, members are owners who share in the success of the credit union. But what if it fails? Members need not worry: In 1970 Congress created the National Credit Union Share Insurance Fund to insure members' deposits in credit unions up to the $100,000 federal limit.
Credit unions offer family memberships and with student loans, home equity loans, personal savings, IRA accounts, credit cards, checking accounts and other services all handled under a single umbrella, credit union members generally find it simpler to handle their finances.
Originating in Europe, the first U.S. credit union was formed in Manchester, N.H. in 1909. Today there are more than 12,000 credit unions with $316 billion in assets, serving 70 million people throughout the U.S.
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