Use Insured Credit Unions

What's the difference between a regular bank and a credit union? Also I've been told that you must be an employee of...someplace to have an account with them.

Editor's Note: Here's an answer from the Federal Reserve Board:

"What is the difference between a bank and a credit union?

A bank is a for-profit organization. Banks hold deposits, make loans, pay checks, and provide other related services for the public. They collect funds from three sources: demand, savings, and time deposits; short-term borrowings from other banks; and equity capital.

A credit union is a not-for-profit financial cooperative that makes personal loans and offers other consumer banking services to individuals sharing a common bond or affiliation, such as a common employer.

Because credit unions operate as not-for-profit institutions, they are exempt from both federal and local taxes. Consequently, credit unions can charge below-market rates on loans while paying higher rates to savers. A credit union gets its operating funds from shares purchased by individual owners, who are members. It also pays dividends (representing the payment of interest) out of earnings."

Many areas have community credit unions. We have two here in our area. Look in your phone book for credit unions and call them to find out the requirements for joining. Many, at least in our state (Washington) are open to anyone.
Susan from ThriftyFun