What’s not to love about credit unions? Lately, it’s become rather difficult to find any disadvantage to banking with a credit union over a traditional bank.
Gone are the days when not-for-profit financial institutions could only offer the most basic of services; now credit unions can provide their members everything from deposit accounts to home loans to insurance products — even services for investing in stocks and other securities.
Busting Credit Union Myths
These community financial institutions have been growing in popularity because of their ability to provide more competitive interest rates on savings accounts and loans, superior customer service and all around better banking experience.
But it was a long road to reaching this reputation in the eyes of the general public, and credit unions are still struggling to quash a few persistent myths:
1. It’s hard to join a credit union: Even though credit unions have membership requirements that limit who can join, most are not very restrictive. In fact, many allow just about anyone who is local to the community the institution serves to join.
2. Access to branches and ATMs is limited: While it’s not uncommon for credit unions to only have a few or even just one branch, most are part of ATM and branch networks that share access with each other’s members. That means credit union members can still access their money even if they’re nowhere near an actual branch.
3. Credit union members enjoy fewer services: Quite the contrary — the best credit unions offer all the same services you’d expect to find at a major bank, and recently, that includes discount brokerage and investment services.
Discount Brokerage Services at Credit Unions
Most credit unions offering investment services aren’t actually providing these services themselves, but working in partnership with third-party discount brokerage firms. These discount brokerages may not be familiar to the average credit union member, as they’re not popular names like E*Trade or Trade King. However, in the world of credit unions, a handful of firms are prominent and reputable, helping members with investing in stocks, bonds, mutual funds and more. Some of the most well-know include:
BestVest charges one of the higher commissions of discount brokerages at $24.95, though as the firm points out, “you get what you pay for.” BestVest doesn’t require a minimum balance, and doesn’t charge inactivity or account closing fees. Members receive access to online and broker-assisted trading.
CUNA Brokerage Services
A subsidiary of CUNA Mutual Group, CUNA Brokerage Services is is a financial investment advisory firm headquartered in Waverly, Iowa and a registered broker dealer in all 50 states. Trades through CUNA Brokerage Services cost $15 per.
Credit Union Investment Services (CUIS)
Based in North Hills, NC, Credit Union Investment Services is a Registered Investment Advisor (RIA) with 285 advisors nationwide, and a wholly-owned subsidiary of State Employees’ Credit Union. CUIS charges an annual asset-based fee of 0.25 percent, which is automatically pulled from your account each quarter.
CUSO Financial Services L.P. (CFS)
CFS is a broker dealer and RIA that serves more than 150 credit unions. This broker’s commission is one of the more affordable as compared to others, charging $14.95 per trade.
Best Credit Unions for Investing in Stocks
Just like not all banks facilitate investing in stocks, not all credit unions do either. However, there is such a large number of credit unions across the U.S. that do offer discount brokerage or similar investing services that you probably live near one.
Considering the higher commissions charged by credit union investment services, it’s important to understand the true benefits to investing in stocks via a credit union rather than a lower-cost discount brokerage like those mentioned above.
Investors looking to receive aid in managing their investment portfolios with the same personal, one-on-one service the best credit unions are known for providing members — and who will do anything to avoid dealing with banks — are the perfect candidates for investing with credit unions.