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BY Ken Tumin
Update 4/2/2017: For a newer list, please refer to my post, The Big List of Credit Unions Open to Anyone.
You often can get better deals at credit unions than at banks, even online banks. The only problem is that credit unions have membership restrictions. So if you don't fall in a credit union's field of membership, you can't join and you can't get the deal (here's a good overview of credit unions).Credit union's field of membership can vary greatly. Some credit unions restrict members to employees of just one company. Other credit unions allow all residents of several state counties. And a few credit unions have field of memberships that include organizations in which anyone can join.
Below is a list of credit unions that have wide open field of memberships. If you're not an employee of the required company or live outside of the membership areas, you can can be eligible to join by becoming a member to an organization or club. The organization usually has a small yearly membership fee. However, once you're a member of a credit union, you're a member for life. So you don't need to renew membership to that organization. The branches of these credit unions may not be near where you live, however, you can often open accounts online or through the mail. Also by using the credit union networks, you'll be able to do transactions at a network branch near where you live.
Open-To-All Credit Union List
Pentagon Federal Credit Union has branches around Washington DC and all over the country near military bases. They don't have great deposit rates, however, they're best known for their great auto loan rates which are as low as 4.75% APR for 60 months for both new and used cars. Joining the National Military Family Association will make you eligible to join.
Patelco Credit Union is based in San Francisco California. They often have good deposit deals and bonuses. Earlier this year they were offering a $50 signup bonus just for opening up a savings account. Their current deals include a 3.89% 6-month CD and a 4.33% 12-month CD. Anyone can join the California Association for Older Americans to become eligible to join. This credit union is sort of an oddball in that it is not insured by NCUA (credit union's version of FDIC). Instead it's privately insured.
Digital Federal Credit Union is based in Maynard Massachusetts. Like Patelco, they often have great deposit deals. They use to offer a 5% 16-month CD. Currently, they're offering a 4.40% 11-month CD. They provide a list of 5 associations in which anyone can join to become eligible. The cheapest is the AAPD which has a membership fee of $15.
GTE Federal Credit Union is based in Tampa Florida. Currently, they have some decent CD deals (4.18% 30-month CD and 4.70% 60-month CD with only $500 minimum deposit). By joining CUSavers, a non-profit educational financial club, for $10 you'll be qualified to become a credit union member.
Lockheed Credit Union is based in Burbank California. They had been offering a 4% rate on their money market account for balances over $25K. Last month they reduced it to 3.5%. This deal wasn't displayed on their website. You had to call or visit a branch to find out about it. I found out from this Fatwallet thread. You can be qualified to become a member by joining the non-profit Achievers Club.
Meadows Credit Union is based out of Arlington Heights Illinois. Their current deals include a 10-month 4.00% CD and a 20-month 4.12% CD. This credit union has the easiest eligibility requirements. All you need is an e-mail address.
Shouldn't These Credit Unions Be Considered Banks?
There doesn't seem to be a problem for consumers when credit unions make it easy to join. It gives us more choices. Banks, however, see it as unfair competition since credit unions have special tax-exempt status and fewer regulations.
There is one issue that consumers may care about regarding these types of credit unions. If they are able to use their tax advantages to reduce the market share of banks, it'll result in fewer tax revenues from banks. Eventually it will result in higher taxes for individuals. An article from the Council for Sound Tax Policy discusses this issue. It also gives an example of a credit union ad showing how lax some credits have become regarding their field of membership. Another article by the America Bankers Association pokes fun at how some credit unions have morphed into banks. It lists several "you might be a morphed bank" examples. Here are a few:
- If your field of membership is anyone who lives or works in the state of Washington, you might be a morphed credit union
- If your field of membership is open to all military and civilian employees of the Department of Defense worldwide, you might be a morphed credit union.
- If membership is open to all responsible people who want to be members, you might be a morphed credit union.
- If you advertise -- "Q. Can I join? A. Are you breathing?" -- as a criteria for joining, you might be a morphed credit union.
I wonder what the author of this article would think of Meadows Credit Union and its email eligibility?