The History of Credit Unions

Credit unions aren't a new idea. Cooperative credit organizations began in Germany in the mid-1800s. Farmers pooled their money to buy supplies in large quantities at low prices. Excess earnings during good times were also pooled into a common account. This money was used for future purchases and for recovery in case of crop failure. During poor harvests, individual farmers could borrow from the common savings at low interest rates.

Early cooperative efforts were managed by volunteers driven by a shared idea - to help working people build a better life. The founders believed that if they joined together in a cooperative spirit, they could solve problems of scarcity and high interest rates.

• Credit unions spread quickly through Europe, and then to Canada.
• Edward Filene, a Boston merchant, introduced the idea to the United States in the early 1900s.

Credit Unions do it better

Year after year, credit unions are consistently ranked at the top in nation-wide surveys as providing superior service over commercial financial institutions.
Not-for-profit financial cooperatives, credit unions are owned and governed by their members. As such, the benefits realized by lower costs are passed on to members in the form of better interest rates on savings and lower interest rates on loans.

Credit union deposit accounts include:

• Savings accounts with no fees, and tiered interest rates
• Interest-earning checking accounts with no minimum balance requirements or fees
• Certificates of deposit with terms from 12 to 60 months
• Traditional, Roth and Coverdell Education Savings Accounts (ESAs)
• Vacation and Christmas Clubs