How to Switch From a Bank to a Credit Union

5 MIN. READ

Key takeaways:

Credit unions have clear benefits over traditional banks, including a not-for-profit model and a local focus.
Switching to a credit union will help you save on the banking products you need and give you access to personalized financial advice.
Power Financial Credit Union membership is open to anyone living, working, or going to school in South Florida.

What if you could bank while spending less on fees and benefit from better interest rates on loans and savings products?

At Power Financial Credit Union, our almost 35,000 members enjoy a full selection of personal and business banking products while getting all the benefits of a credit union. These include spending less on banking fees and being a part-owner of a financial cooperative with their best interest at heart.

Switching to a credit union is easier than you might think and will help you reach your financial goals.

Why Should I Switch to a Credit Union?

Credit unions are fundamentally different from banks because their goal isn’t to make a profit. Instead, we exist to serve the community and support financial health through affordable and accessible banking products.

Data reveals that switching to a credit union translates into tangible benefits, as credit unions offer significantly more affordable rates on several products than traditional banks. When a credit union makes a profit, the money doesn’t go to investors. Instead, it goes back to the members through free services, lower fees, or more competitive rates. It means paying less interest when you finance a car or apply for a mortgage and getting a more advantageous rate on savings accounts, money market products, or Certificates of Deposit.

A Local Focus

The benefits don’t stop there. With a heart for Main Street instead of Wall Street, credit unions provide better member service and act as local employers. At PFCU, our team are members of the community who are often bilingual and offer personalized banking advice as you navigate life’s financial milestones.

While banks often spend their profits to expand in other areas, credit unions remain local. The money you deposit stays in the community and will fund loans for local families and businesses, contributing to a strong local economy.

Part-Ownership

Credit unions have a tangible bond with their community thanks to their cooperative structure. As a member, you’re also a part-owner of your local credit union, which gives you the right to vote in important decisions and elect a board of representatives.

By having local members make important decisions, credit unions stay true to their goal of serving their community.

A Diverse Selection of Banking Products

Don’t let credit unions’ local focus fool you: In spite of having a smaller network compared to traditional banks, credit unions offer a diverse selection of banking products.

And, unlike with traditional banks, there is no pressure to keep using more products. Credit union representatives always take the time to listen to your unique needs and recommend what's best for you.

Options include:

Having access to a wide range of banking products combined with personalized advice makes a real difference. Credit union members tend to have better financial wellness compared to bank customers, thanks to lower fees, easier approval for loans and sound financial guidance.

Do Traditional Banks Have Any Advantages Over Credit Unions?

Many new members are under the impression that their money is safer with a major bank. It’s not necessarily true.

Just like the Federal Deposit Insurance Corporation (FDIC) insures accounts at a bank, the National Credit Union Association (NCUA) insures accounts up to $250,000 at credit unions. This covers your checking accounts, savings accounts, CDs, and money market accounts, as well as traditional and Roth IRAs.

In the past, major banks had an advantage with mobile banking and other innovations. However, credit unions have been catching up and now offer comparable experiences, with apps for mobile banking, online applications and more. But, unlike major banks, credit unions don’t aim to replace in-person interactions with online banking. These digital experiences are available if they feel more convenient to you, but you still have the option to visit a local branch if you need help.

How to Switch to a Credit Union

To get all these benefits, you’ll need to switch to a credit union. It’s an easy process, and the good news is that you can switch your finances one account at a time.

Your first step should be to find a credit union you can join:

Credit unions have membership requirements, usually based on where you live or which organization you work for.
The current trend is for credit unions to expand these requirements so that more people can join.

Once you’ve found a credit union you’re eligible for, you can follow these steps:

Open your account: Most credit unions will ask you to fill out a simple form to apply for membership, which you can do online or in person. Once approved, you’ll get a credit union account and become a part-owner.
Make your initial deposit: You usually have to make a small deposit into this account. It varies by credit union but typically ranges from $5 to 25.
Update your direct deposit information: Your paycheck will be deposited in your new credit union account, facilitating bill payments and other financial transactions.
Check on your automatic payments: Cancel automated payments tied to your old account or debit card and set up these payments with your credit union account instead.
Close your old accounts: Once you've set up your new direct deposit and transferred your automated payments, it's time to close your old bank account.
Consider how additional products fit into your financial plan: A credit union representative can review additional banking products, such as credit cards, savings accounts, or investment options. You can also order checks from your local branch if you use them.
Refinancing current loans. If you have any active loans, you should look into refinancing them via your new credit union. It’s usually a great way to save on interest.

Switch to Power Financial Credit Union

At Power Financial Credit Union, we’ve been serving South Florida communities since 1951. We now have close to 35,000 members and work hard to offer affordable and flexible banking products.

Who can join PFCU? If you live, work, or go to school in South Florida, we’d like to invite you to apply for membership. We offer a simple online application process and a credit union switch kit to help you transfer your finances to a new institution.

You can open your PFCU account online or visit a local South Florida branch for help switching to our credit union.

FAQs About How to Switch to a Credit Union

What information do I need to open a credit union account?

You’ll typically need an ID, your Social Security Number, and a document with your address on it.

Can I save money by switching to a credit union?

Yes, because credit unions are not for-profit, you can usually get the same banking products with no or low fees.

Are credit unions just as good as banks?

Credit unions have caught up to banks regarding mobile banking and other convenient experiences. They have an advantage thanks to their low fees and local focus.