Best Credit Unions of 2024 — Alternative Banking

If you’re looking to open a new bank account or exploring options to switch your current accounts, you may have encountered a few credit unions. Credit unions are often excellent places to open checking and savings accounts, with the same protections and options as big banks, often with better terms.
In this guide, I’ll quickly explain how credit unions work, run you through the top 9 options on the marketplace, explore FAQs about credit unions, and run you through the pros and cons of this type of financial institution.

What are credit unions?

Credit unions are not-for-profit financial institutions with members rather than customers. Unlike traditional for-profit banks, credit unions work to serve their members, with small credit unions focusing on bettering communities. Credit unions typically offer the same services as larger banks but with better interest rates and terms.
At a traditional bank, your money is insured by the FDIC (Federal Deposit Insurance Corporation). If you bank at a credit union, your money is federally insured through the NCUA (National Credit Union Administration). The NCUA not only insures deposits but also regulates credit unions and protects the members and owners of credit unions.

Overview of the best credit unions

Credit Union
Best For
Navy Federal Credit Union
Debt consolidation
Alliant Credit Union
ATM access 
Consumers Credit Union
High APR savings
PenFed
Mortgages
Tech
Midwest banking
Connexus
National network

Best credit unions

Don’t let its name fool you: Navy Federal Credit Union offers a much broader membership eligibility than just active members of the Navy. While it was initially founded to serve employees of the Navy in the 1930s, it has since grown to encompass all military employees, as well as their family members and veterans. This means that you can qualify to be a member of the Navy Federal Credit Union if you meet any of the following criteria:
  • Active duty military
  • Retired military
  • Veteran of the military
  • Familial relationship (parent, grandparent, spouse, sibling, or child) of any active, retired, or veteran of the military
  • Employee of the Department of Defense
One perk of banking with Navy Federal Credit Union is that they have a large number of branches. With 355 worldwide branches and close to 30,000 ATMs available to use for free, this is a credit union with a larger presence, not dissimilar to some banking institutions. They offer five checking account options for their members and one savings account with a 0.25% APY.
Some perks offered across Navy Federal Credit Union’s checking accounts include up to $240 in ATM rebates a year for members with a Free Active Duty Checking account and no monthly fees or balance requirements on their Free Campus Checking account. If you carry a large balance in your checking account, you can also benefit from their Flagship Checking account, which offers between 0.35% to 0.45% APY and waives the $10 monthly fee if your balance remains higher than $1,500.
Beyond savings and checking accounts, Navy Federal Credit Union offers credit cards, money market accounts, auto loans, student loans, mortgages, and home equity loans. Navy Federal Credit Union is also worth exploring if you’re interested in debt consolidation. This is because the Navy Federal Credit Union offers a wide range of debt consolidation loan amounts, competitive interest rates, and no origination fees.

Alliant Credit Union

While Alliant has its headquarters in Chicago, IL, they are available — both via deposit ATMs and physical brick-and-mortar branches — across the country. With 80,000 fee-free ATMs nationwide and a $20 monthly ATM rebate, Alliant certainly has quite a national presence.
Alliant partners with a wide range of companies where employment is among the most common requirements for union membership. Additionally, you can be eligible to join the credit union if you live somewhere surrounding Chicago, if your family member or spouse is already a member, or if you make a donation to Foster Care to Success.
Alliant’s checking account offers 0.25% APY if you make at least one monthly deposit and are signed up for electronic statements. It also comes with no minimum deposit or balance requirements. They also offer a checking account for teenagers 18 years old or younger. 
If you’re interested in opening a savings account with Alliant, their high-yield option has an APY of 2.60%. You can open one of these accounts for as little as $5 and have no fee associated with the account as long as you’re signed up for electronic statements instead of paper statements. Alliant also offers CDs, personal loans, credit cards, auto loans, student loans, mortgages, and home equity loans.

Consumers Credit Union

Consumers Credit Union might be based in Illinois; however, if you bank digitally, you can open an account anywhere in the United States. Even so, most people will get the most value if they reside in Illinois and use the credit union since its brick-and-mortar locations are all found in Illinois. If you bank with them digitally, you’ll have access to a 30,000 ATM network with no fees.
One nice thing about Consumers Credit Union’s website is that they advertise various APR rates online. This makes it easier to compare with the competition than some other credit unions on this list. As such, you may choose to open an account with them just because of their transparency around various financial products such as auto loans, 10-month certificates of deposit, and Rewards Checking.
Rewards Checking is one of the strongest offerings of Consumers Credit Union. It comes with 5% APY on deposits up to $10,000, as well as early direct deposit of your paycheck and no monthly fees or minimums. Consumers Credit Union’s free checking account is a bit more no-frills, but their Student Choice Checking comes with early direct deposit, too, if you’re willing to sacrifice being able to use paper checks.
In terms of savings accounts, your best bet with Consumers Credit Union is to take advantage of their Smart Saver account. When you open a Smart Saver savings account with Consumers and already have a checking account, you’ll get access to a 2% APY — as long as you deposit between $50 and $1,000 monthly. You’ll also need to be sure that you’re direct depositing (or mobile depositing) at least $500 into your checking each month and are enrolled in online statements to reap the full 2% benefit.

PenFed

Commonly abbreviated as PenFed, this credit union’s full name is Pentagon Federal Credit Union. Like many credit unions on this list, PenFed was founded in the 1930s. While the reference to the Pentagon may make it seem as if it is locally connected to Washington D.C., this credit union has membership in all 50 states as well as Puerto Rico, Okinawa, and Guam.
As far as checking accounts go, PenFed’s basic offering isn’t much to bat an eye at. However, their Access America account is a bit more attractive when it comes to checking. This is because the Access America checking account includes popular features such as 0.15% APY on balances of $20,000 or less and 0.35% APY on all daily balances between $20,000 and $50,000. They also offer online banking, with 24/7 access using your computer or their mobile app.
In terms of savings accounts, the 3.00% APY offered by PenFed Credit Union’s Premium Online Savings is a solid deal. It only costs you $5 to open a Premium Online Savings account, and the account comes with other features such as no monthly maintenance fee and free online transfers. You can also explore money market accounts with PenFed, credit cards, HELOCs, and auto loans.
To be a member of PenFed Credit Union, you used to have to be a government employee or a military member. However, nowadays, PenFed just requires you to make a $5 deposit to open a checking or savings account. Another of the things that PenFed is most highly esteemed for is its offerings in the world of mortgages. As an Equal Housing member, they offer a variety of financial products, including VA Loans, FHA loans, conventional fixed loans, and jumbo loans.

Tech

Admittedly, Tech Credit Union doesn’t have the most attractive or up-to-date-looking website. However, just because their website looks outdated doesn’t mean they shouldn’t be on your list of credit unions to consider. They have been around since the 1930s, where, according to their website, they were initially chartered as “Carnegie-Illinois Steel Employees Gary Works Federal Credit Union to serve the employees and families of the mill, which later became known as U.S. Steel Gary Works.”
Due to their origination in northwestern Indiana, most of their branches are also in the midwest, particularly Indiana and Illinois. Tech is also a part of two fee-free ATM networks. If you’re looking to make a cash withdrawal or deposit at an ATM as someone banking with Tech Credit Union, you’ll be able to do so at 30,000 ATMs as part of the Co-Op Network of ATMs, or 6,000 ATMs at the Alliance One network, which includes Puerto Rico.
Tech Credit Union checking accounts offer no minimum balance and no monthly service charge, but you will need to make a $25 deposit to open your bank account. Tech Credit Union offers useful features with its checking account, like free mobile banking and check deposit, as well as a box of free Tech Credit Union checks. Their Money Market saving accounts also require a minimum deposit of $25 to be opened and come with no monthly service fee. Their high-yield Money Mover savings account requires a $25,000 minimum balance to accrue interest.
Beyond checking and savings accounts, you can open a credit card, IRA, mortgage, and home equity loan with Tech. They also offer car loans with no prepayment penalties if you’re looking for a good deal on an auto loan. You can also open a 5.12% APY 11-Month certificate of deposit (CD) if you want a guaranteed return on an investment.

Connexus

As far as nationally-available credit unions go, Connexus is a major player. They work with nearly half a million members and are available in every state in the USA. Beyond that, they also offer 24/7 digital banking online or using the Connexus mobile app.
All three of Connexus’ checking accounts are available free of charge. Their Xtraordinary checking account offers up to 1.75% APY as a monthly yield and a $25 monthly rebate on ATM charges. The Connexus Innovative checking account is more of a middle-ground account, which doesn’t come with a monthly yield or ATM rebates but also doesn’t require $400 in debit card spending or 15 debit card purchases to qualify for those perks like the Xtraordinary account. Finally, their Teen checking account offers 2.00% APY, allowing students to save more.
In addition to its checking and savings accounts, there are also a variety of loans available from Connexus. From auto loans for a new or used car (or a refinance) to personal student loans, lines of credit, and mortgages, Connexus can meet your needs.
Connexus advertises that its members can earn ten times more with their accounts than the national average when it comes to their rates. Currently, Connexus also offers 5.41% APY on 17-year Certificates for a guaranteed return. Combined with their high-yield checking account option, Connexus is a great choice for members looking to grow their money with a credit union.

Best credit unions summary

Credit Union
Mortgage Interest Rate
Auto Loans
Credit Cards
Navy Federal Credit Union
As low as 6.846% APR
As low as 4.54% APR
As low as 11.24% APR
Alliant Credit Union
As low as 6.427%
As low as 6.75%
As low as 17.49% APR
Consumers Credit Union
Contact Consumers for rates
As low as 6.34% APR
As low as 14.95% APR
PenFed
As low as 6.885% APR
As low as 5.24% APR
Rate based on creditworthiness
Tech
Contact Tech for rates
As low as 7.74% APR
Rate based on creditworthiness
Connexus
Contact Connexus for rates
As low as 7.74% APR
Rate based on creditworthiness

FAQs

What is a major advantage of using credit unions?
Credit unions usually offer better interest rates on savings accounts, credit cards, and loans, than traditional banks. Credit unions also often offer free accounts and have fewer fees than big banks.
What are the disadvantages of a credit union?
Credit unions often have fewer branch locations than most national banks and may only be located in certain parts of the country. They also may have access to fewer fee-free ATMs. Some credit unions also offer fewer banking products than traditional banks.
Are credit unions safer than banks?
Both credit unions and banks are insured by the federal government. Credit unions are insured by the National Credit Union Association (NCUA) and banks are insured by the Federal Deposit Insurance Corporation (FDIC).
Should I get a mortgage from a credit union?
Credit unions can often offer low rates on mortgages, but it’s important to shop around for the terms, rates, and payments that best fit your financial situation before deciding on a lender.

Pros and cons of credit unions

Pros
  • Better rates. If you’re looking for high-interest rate savings accounts, credit unions often have much higher rates than national banks. Credit unions also tend to have lower mortgage and loan rates.
  • More flexible financing approvals. Credit unions are often able to work with you more closely when applying for a loan, mortgage, or credit card and can often customize a plan to get you approved for financing or improve your credit to boost your chances of approval.
  • Better financial education. Most credit unions offer financial literacy programs and information to help you better take control of your finances to reduce debt, improve your credit, or start meeting your savings goals.
Cons
  • Harder to access. Credit unions tend to have fewer locations across the country than national banks and may have limited ways to deposit cash if you do not live near a branch. This can make it hard to access your money or talk to a representative in person.
  • Stricter membership requirements. Credit unions all serve their members, but becoming a member may not be straightforward. Many credit unions limit membership to city, state, or regional areas, company employees, and different affiliate programs.

Why you should (or shouldn’t) use a credit union

If you’re looking for a more personal banking experience, a smaller credit union might not be a bad place to open an account. Credit unions typically offer more competitive interest rates on your savings account, loans, and credit cards when compared to bigger banks. Credit unions can also come with fewer fees and offer free accounts. All of this means that more of your money goes to your account and not the institution running your account.
On the other hand, certain drawbacks may cause you to reconsider using a credit union. For starters, if you travel a lot or want a bank with more of a national footprint, you may be out of luck with a credit union. Credit unions are frequently localized to specific regions or states, meaning that you may have access to fewer in-network options for ATM banking, too.

The bottom line

Credit unions can be an excellent alternative to big banks. While credit unions boast better rates and free checking and savings account options, making sure you meet membership requirements before settling on a particular credit union is important. If in-person service is important to you, you’ll also want to make sure there’s a physical branch nearby.
Additional reporting by Brent Eickoff.

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