Credit union facts for kids

A credit union is like a special kind of financial institution that is owned and controlled by its members. Unlike regular banks, credit unions don't have outside owners or shareholders. Instead, the people who use the credit union's services are the actual owners.

When a credit union makes money, it doesn't go to outside investors. Instead, the profits are shared with the members. This often happens through lower fees, better interest rates on savings, or lower interest rates on loans. The main things a credit union does are help members save money and offer them loans.

What is a Credit Union?

A credit union is a cooperative organization. This means it's set up to help its members, not to make a lot of money for shareholders. It's like a club where everyone helps each other with their money.

How Credit Unions are Different

Credit unions are unique because their members are also their owners. If you have an account at a credit union, you're a part-owner! This is different from big banks that are owned by investors who want to make a profit.

• Owned by Members: The people who save money and get loans are the owners.
• Not for Profit: Credit unions focus on helping members, not on making big profits for outside investors.
• Profits Shared: Any money the credit union makes is usually given back to members. This can be through lower fees or better interest rates.

What Can You Do at a Credit Union?

Just like a bank, a credit union offers many services to help you manage your money.

• Savings Accounts: You can open accounts to save your money safely.
• Loans: Credit unions offer loans for things like cars, homes, or even starting a small business.
• Checking Accounts: Many credit unions also offer checking accounts for daily spending.
• Financial Advice: They can often give you advice on how to save, budget, and manage your money wisely.

History of Credit Unions

The idea of credit unions started a long time ago. People realized that by working together, they could help each other with money.

Early Beginnings

One of the first people to start a cooperative like a credit union was Samuel Jurkovič. In 1845, he helped create a group called Spolok Gazdovský in what is now Slovakia. This group helped farmers save money and get loans.

Another important person was Friedrich Wilhelm Raiffeisen from Germany. In the mid-1800s, he started the first rural credit unions. These helped farmers and workers in the countryside get fair loans and save money.

Credit Unions Around the World

The idea of credit unions spread quickly.

• In Canada, the first caisse populaire (a type of credit union) was started in 1900 in Lévis, Quebec. This was thanks to Alphonse Desjardins.
• Today, credit unions are found all over the world, helping millions of people manage their money. They are especially popular in communities where people want a financial institution that truly cares about its members.

Images for kids

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  A branch of the Coastal Federal Credit Union in Raleigh, North Carolina

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  The statue of Samuel Jurkovič, national awakener and founder of first cooperative (credit union) in Central Europe (Spolok Gazdovský) in Rača, Bratislava

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  The directors of the Mulukanoor Women's Thrift Cooperative stand at the entrance to their credit union in Karimnagar district, Telangana, India.

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  Friedrich Wilhelm Raiffeisen founded the first rural credit unions in Germany.

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  A caisse populaire credit union in Lévis, Quebec, circa 1920

See also

In Spanish: Cooperativa de ahorro y crédito para niños