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By Leslie Cook
October 27, 2021
Two hands are holding the a money bill.
Janice Chang for Money

As a member of a credit union you’ll be able to do everything you can do at a bank but with a major difference. While banks are for-profit institutions, credit unions are not. Instead, they are financial cooperatives owned and operated by their members.

Because credit unions tend to have lower operating costs than national banks, they frequently offer higher interest rates on checking and savings accounts, as well as lower account fees, lower interest rates on loan products and more flexible lending standards.

Most credit unions are relatively small compared to national banks, so chances are you will have to do a little extra research to find one you like. However, with online offerings, credit unions can be accessible to anyone, anywhere. And large ATM networks make accessing your money easy, even if you don’t have a credit union branch nearby.

Our picks for best credit unions of 2021-2022

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Penfed is our choice for the best overall credit union for the second year in a row. Its combination of high yields, low fees, easy-to-meet membership requirements and large ATM network make it hard to beat.

Pros:

  • High yields paid on CDs, savings and checking accounts
  • Low monthly maintenance fees
  • Easy to join
  • Large ATM network

Cons:

  • Checking account has a maintenance fee.
  • Not all savings accounts come with an ATM card.

You can become a member of Penfed just by opening a savings account with a minimum of $5. The Premium Online Savings Account pays 0.50% interest on all balances and has no monthly maintenance fees. There is a little bit of a trade-off, however. This account doesn’t come with an ATM card, so you’ll need to make a withdrawal at a branch or transfer funds to a different account in order to access your money. Penfed’s Regular Savings and Money Market Savings accounts do provide access to over 85,000 ATMs across the country, but pay lower interest rates. The Regular account pays 0.05% and the Money Market pays up to 0.15%, depending on the account balance.

With the Access America Checking account, you can earn 0.15% interest on balances below $20,000 and 0.35% on balances between $20,000 and $50,000. There is a monthly service fee of $10, but it can be waived if you set up a monthly direct deposit of at least $500 or keep a daily balance of $500 or more in the account.

Penfed’s Money Market CDs pay between 0.40% and 1.50%, depending on the term length, which is higher than at many of the other credit unions we looked at. There is a $1,000 minimum opening balance, which isn’t unreasonable but is more than the minimum required by other institutions.

With a checking account that pays an interest rate well above what any other credit union offers, Lake Michigan is our pick for the best high-yield checking account.

Pros:

  • Max Checking account pays 3% interest.
  • Easy to meet membership requirements
  • Low monthly fees and opening balance requirements
  • ATM fee reimbursements

Cons:

  • There are caveats to earning 3% interest on checking.
  • Limited number of branches

You can easily join Lake Michigan Credit Union by opening a savings account with a minimum of $5. With the Max Checking Account, you can earn 3% interest on balances up to $15,000, a rate that is well above those offered not only by other credit unions but also other national and online banks. There‘s no minimum opening balance required, and there are no monthly fees attached to the account.

You must meet all of the account requirements to earn Max Checking’s top rate, however, which may be a problem for some customers. These requirements are: Receive a minimum of one direct deposit into the account per month; make a minimum of 10 debit or credit card transactions per month; log into your account at least four times per month; and sign up to receive e-statements and e-notices. There is another big caveat too: The account pays no interest at all on balances above $15,000.

In addition to LCMU’s 57 ATMs, you’ll also have free access to over 55,000 Allpoint ATMs nationwide. The credit union will reimburse up to $10 per month in non-LCMU and non-Allpoint ATM fees. If you want in-person attention though, your options are few. LCMU branches are limited to Michigan (46) and Florida (13).

Even the best credit unions we looked at typically require you to open an account and deposit $5 to join. For many customers Alliant does them one better, by paying them $5 when they sign on.

Pros:

  • Multiple ways to become a member
  • Opening account balance paid by Alliant for some
  • High yields on savings and checking accounts
  • Low monthly fees
  • Large ATM network

Cons:

  • Other membership requirements besides opening an account
  • There are requirements to earn interest on the checking account.

There are a number of ways to become a member of Alliant. Anyone who becomes a member of charity Foster Care to Success (membership is $5 and Alliant will pay that fee for you) can join.

You can also join the credit union if a family member or domestic partner is already a member, or you are employed at or retired from a qualifying business, such as American Airlines or Morningstar. Membership is also open to anyone living or working in the many communities surrounding Alliant headquarters in Chicago. If you qualify to become a member, Alliant will pay the minimum opening account balance of $5 for you. In other words, you get a $5 bonus for signing up.

Alliant accounts offer competitive terms too: The High Rate Checking Account pays a decent 0.25% interest on all balances if you sign up for e-statements and make at least one electronic deposit per month. There are no monthly maintenance fees or minimum balance requirements to earn interest. Plus, you can earn 0.55% interest on the High Yield Savings Account as long as you keep a minimum balance of $100 in the account.

Alliant partners with other credit unions, ATM networks and businesses such as Target to provide free access to your accounts at more than 80,000 ATMs around the country. You can get reimbursements of up to $20 per month in ATM surcharges from non-Alliant ATMs.

We chose Digital Federal’s Credit Union because its Advantage Savings Account offers one of the best interest rates around and comes with no strings attached.

Pros:

  • High interest rate on savings account
  • No monthly fees and no minimum opening balance requirements
  • Access to a large ATM network
  • ATM fee reimbursements up to $300 per year

Cons:

  • Membership is more restricted than some other credit unions.
  • There are conditions to obtaining $300 in ATM fee reimbursements.

With the Advantage Savings Account, you can earn 0.50% interest no matter how much you keep in the account. That’s unusual because most credit unions have a balance cap for their best interest rate. There is no minimum to open an account at Digital Federal, no minimum balance requirement to earn interest and no monthly maintenance fees. Simply open the account and start earning.

You can also earn 0.25% interest on DCU’s Free Checking Account when you activate the Earn More feature (Earn More is “sweep account” feature where funds are automatically transferred or “swept” to a participating financial institution that pays interest). If you add direct deposit and make at least five transactions per month on the Free Checking Account, DCU will reimburse up to $300 per year in non-DCU ATM fees. Use your checking account to make electronic loan payments and get a 0.50% discount on most consumer loans with the credit union.

Membership in DCU, while still open to many, is a little more limited than other credit unions we considered. You can join DCU by one of four ways: Be related to an existing member, including domestic partnerships; work at or be retired from one of the thousands of participating employers; belong or be related to someone who belongs to an organization served by DCU; or live, work, worship or attend school in one of the Massachusetts communities, such as the city of Worcester, served by the credit union.

DCU has only 23 branches located in Massachusetts and New Hampshire but members can also do business at close to 6,000 shared branches (a national network of credit unions that share facilities to allow members access to branches around the country, regardless of where the home credit union is located). You’ll also have free access to over 80,000 ATMs nationwide.

The Bethpage mobile app gives you 24/7 access to all of your accounts, provides an easy way to make payments, and gives you tools to help you keep track of your spending. It also earned a rating of 4.8 out of five stars on Google Play, making it the highest user rating of all the credit union apps we considered.

Pros:

  • Easy to use app
  • Top marks in user reviews
  • Digital payments on loans and bills
  • Biometric login options

Cons:

  • The app tends to get glitches after updates.

Bethpage’s mobile app lets you quickly access all your accounts. The “Pay Anyone” feature allows you to send money to family and friends even if they don’t have a Bethpage account. You can also set up Bill Pay to take care of recurring monthly payments, transfer money between accounts and deposit checks on your phone.

You have flexible login options by using either a password, your fingerprint or facial recognition. The app’s Snapshot feature allows you to quickly see your checking account balance without having to log in.

Bethpage’s app earned 4.8 out of five stars on Google Play, the highest user rating of all the apps we looked at. Most of the positive user reviews mention the app’s ease of navigation, ability to track account balances and make payments, and the tools to help users keep track of expenses. As with many apps, most negative reviews mentioned the app not functioning properly after an update is installed, frozen screens and error messages when trying to log in.

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How We Chose the Best Credit Unions of 2021-2022

To pick the Best Credit Union, Money reviewed 10 of the largest credit unions by assets that were also easy to join. Money then partnered with data provider Curinos to review account minimums and qualifications, interest rates, monthly service fees, ATM fees, overdraft fees, overdraft protection fees, insufficient funds fees, debit card replacement fees, domestic wire transfer fees, and online banking capabilities.

When selecting finalists, priority was given to checking and savings accounts with no or easily waived monthly fees, free ATMs, and higher interest rates. In naming free accounts, we assumed customers would be okay with receiving e-statements to avoid a monthly fee.

When available, we weighed customer service ratings from J.D. Power’s 2020 U.S. Retail Banking Satisfaction Study, 2021 Online Banking Satisfaction Survey, and 2021 Mobile Banking Satisfaction Survey. Money’s edit team independently fact-checked information in September and October.

Interest rates quoted are as of October 25, 2021.

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