A credit union is an alternative for those who are not satisfied with the demands and fees charged by traditional banks. In it, financial services are offered with often more advantageous terms. Like banks, they have checking and savings accounts, credit and debit cards, and personal loans. However, while customers pay for banking services, members do not have to. They participate directly in the credit union’s decisions and profits (or leftovers) by joining.
A credit union is a financial institution formed by a group of legal entities united in society. These partners make their financial movements within the institution and participate in the profits according to the capital entered.
Types of Existing Cooperatives
There are several segments of cooperatives in the market. Therefore, you should look for the one that best fits you.
Among them are:
- Consumer cooperatives;
- Social cooperatives;
- Work cooperatives;
- Transport cooperatives;
- Agricultural cooperatives;
- Health cooperatives;
- Tourism and leisure cooperatives.
They are targeted at specific sectors of the market and achieve conditions and advantages directed to each of them.
How does the credit union work?
In Brazil, these institutions exceed six thousand units. However, unlike banking units, which represent the same bank, each is independent and has its own specificities.
Another difference is that not all free membership units. Some cooperatives are exclusive for specific purposes. They are managed by a board determined by the members. The FGCOOP is the financial guarantee fund for these cooperatives. It assures the value of up to $ 250 thousand for each registered CPF. In this way, these institutions become as secure as banks.
Because they are not for profit, their values are more affordable than those of other institutions.
In addition, until the end of each year, the general meeting is held to direct the remainder of the year. These are usually returned to members in proportion to their financial movements within the cooperative.
The Huge Save Bank is responsible for oversight and confederations providing services such as credit and debit cards.
How to join a financial cooperative?
To join a cooperative, there are their own websites and applications available. Required:
- CNH / RG and CPF;
- Proof of income;
- Proof of address;
- Address and general data.
After that you must choose the type of cooperative you want to integrate. They may have unique segments such as doctors, lawyers, etc. However, they may also be freely adherent. They also have a payment amount, which is on average fifty reais and buys the share of the company. In addition, some require a continuous payment amount, which acts as a kind of monthly payment to be paid in society.
In case of withdrawal, this amount is returned to the person with interest. They are called Interest on Paid Capital.
Advantages of Credit Unions?
By comparing cooperatives with traditional banks, their direct competitors, it is possible to realize several advantages. The interest in credit unions are charged for almost half the price of some banks. This is because while other financial institutions aim for profit, cooperatives seek advantages for their members.
In addition, society is very democratic and the choices are based on the decisions of the whole group. Their result can even be returned to each participant.
Other advantages include:
- Credit democratization;
- Local development;
- Business solutions;
- Interest and fees for less than half of market value;
- Economy movement.
Therefore, for those looking to make financial moves without submitting to high values, the credit union is an option. With it, it saves, develops income-generating projects and actively participates in the national economy. Want more content? Follow our founder letter with daily insights!