Credit unions provide most of the same services as banks. But they do it without all the fees, often paying higher interest on your deposit accounts. And with a credit union, you’re not a customer – you’re a member.

If you’ve heard about old school banking from your parents or grandparents – fee-free checking and being treated like a member of the family – you may want to look into credit unions. There’s probably one located in your community, and even if there isn’t, credit unions today operate much like banks by offering their services online. You can have access to a credit union, and even the best credit unions, from your computer or mobile device. 

In this guide, I’ve prepared a list of what I believe to be the best credit unions in America. Read the descriptions of each then choose one that you believe will work best for your personal needs and preferences. You may be surprised to find that credit unions provide just about all the same services banks do, but without all the fees and limitations.

Overview of the best credit unions

Credit unionBest for
Pentagon Federal Credit UnionCar loans
Navy Federal Credit UnionMembers of the armed forces
Alliant Credit UnionCash back credit card
Boeing Employees Credit UnionBusiness services and banking
DCUHigh interest savings, low interest credit cards
ConnexusHigh interest checking account

Pentagon Federal Credit Union

The 6 Best Credit Unions – These May Make You Want to Abandon Your Bank - PenfedPentagon Federal Credit Union, more commonly known simply as PenFed, is one of the largest credit unions in the country, with more than $25 billion in deposits and two million members. And though the credit union has only 50 branches, they offer their services in all 50 states. The credit union was originally established for the benefit of members of the armed services, it’s now available to all consumers. 

I like PenFed for their car loan programs. Not only do they offer loans for new and used cars, and for both purchases and refinances, but they also offer their car buying service for both new and used vehicles. It provides discounted vehicle pricing when you purchase through the service, as well as mechanical breakdown protection and GAP coverage

You can open a Premium Online Savings Account with just $5, and though the interest rate on the account is on the low end of the spectrum, there is no monthly maintenance fee. Plus, you’ll have access to more than 68,000 fee-free in-network ATMs across the country.

PenFed offers their Access America Checking, which requires a minimum of $25 open. But it’s an interest-bearing account currently paying 0.20% on balances below $20,000, and 0.50% on balances above. There’s a $10 monthly fee, but it can be waived if you maintain a daily balance of $500 or more or set up a monthly direct deposit of at least $500.

The credit union also offers money market savings certificates of deposit, IRAs, rewards credit cards, car loans, home financing, and personal loans. 

Navy Federal Credit Union 

The 6 Best Credit Unions – These May Make You Want to Abandon Your Bank - Navy FederalNavy Federal Credit Union is the largest credit union in the US, with nine million members and more than $110 billion in total assets. The credit union was originally set up to provide banking services to members of the United States Navy, but eventually extended services to members of all branches of the US military, as well veterans and their families. Unfortunately, however, the credit union is not available if you are not a current or former member of the military or a military family member.

They offer several checking accounts, with the Flagship Checking account being the most noteworthy. It currently pays interest ranging from 0.35% to 0.45% APY, and though there’s a $10 monthly service charge, it’s waived with an average daily balance of $1,500 or more. The account also reimburses up to $120 per year in ATM fee rebates with direct deposit. It comes with a debit card that can be used fee-free at more than 28,000 in-network ATMs.

Navy Federal currently pays up to 0.25% on savings accounts, 0.50% on money market accounts, and up to 1.30% on CDs with terms of up to seven years. Of special interest is their Special EasyStart CD, which pays as high as 3.50% APY on a 12-month CD with a minimum deposit of $50, and a maximum of $3,000.

Alliant Credit Union

The 6 Best Credit Unions – These May Make You Want to Abandon Your Bank - Alliant Credit UnionBased in Chicago, Alliant has more than $12 billion in assets and over 500,000 members nationwide. The credit union has been in business for over 80 years, and though it’s headquartered in Illinois, it offers its services to members across the country.

Alliant’s High-Interest Checking account pays 0.25% APY on all balances and has no monthly service fee or minimum balance requirements. You’ll also have access to more than 80,000 fee-free ATMs, as well as up to $20 per month in ATM fee rebates for out-of-network transactions.

On the savings side, they offer their High-Rate Savings account, currently paying 0.75% APY on all balances. There’s no minimum or maximum balance limit, and you can open an account with just $5. And there are no monthly fees to reduce the interest you’ll earn on your balance. 

Alliant also offers certificates of deposit, custodial accounts, traditional, Roth, and SEP IRAs, as well as trust and custodial accounts. And on the lending side, they offer home loans, auto loans, RV loans, personal loans, commercial real estate loans, and credit cards. 

Boeing Employees Credit Union

The 6 Best Credit Unions – These May Make You Want to Abandon Your Bank - Boeing Employees Credit UnionCommonly known as BECU, Boeing Employees Credit Union has more than 50 branch locations in Washington state and in South Carolina. The credit union offers checking and savings accounts, a money market account, CDs, IRAs, and four different Visa cards. Loans include home loans, vehicle loans, student loans, and personal loans. 

BECU offers perhaps the widest range of business banking and business services in the credit union universe, although the types of businesses they service are fairly narrow. 

One of the limitations of BECU is membership. To join, being an employee of Boeing is an obvious advantage. But otherwise, you are required to “live, work, worship, or go to school in Washington state and select Idaho counties, or live or work in select Oregon counties”, or belong to other select associations. I can also presume the same applies for residents of South Carolina, since the credit union now has two branches located near Charleston. 

DCU

The 6 Best Credit Unions – These May Make You Want to Abandon Your Bank - DCUDCU is a Massachusetts-based credit union with just 23 branches in Massachusetts and New Hampshire. But the credit union offers its services on a nationwide basis. I am a member of DCU and have been for nearly six years, and can attest that they provide one of the best banking services I’ve ever experienced (and no, I’m not being compensated for this endorsement in any way!).

DCU offers all the services you would expect from a credit union, like checking, savings, and money market accounts, as well as CDs. They also offer credit cards, student loans, auto loans, personal loans, and home loans.

Of special interest, they offer free checking, and their Primary Savings account, currently paying 6.17% APY on the first $1,000 deposited into the account (it drops to 0.25% on balances exceeding $1,000). On the credit card side, DCU Platinum Visa is available with no annual fee and an 8.50% APR on purchases for well-qualified individuals

But one of the qualities that distinguishes DCU from other credit unions, and much like BECU, is that they do offer business banking accounts. This includes business checking and savings accounts, as well as small business loans, and financing for commercial real estate, and other commercial and industrial loans.

Connexus 

The 6 Best Credit Unions – These May Make You Want to Abandon Your Bank - ConnexusConnexus is a credit union operating 13 branches in Wisconsin, Minnesota, Ohio, and New Hampshire, but they make their services available in all 50 states through their digital banking platform. The credit union has over 375,000 members and nearly $3 billion in assets.

Connexus offers its Xtraordinary Checking account, which pays an incredible 1.75% APY. To earn that rate, you’ll need to make a minimum of 15 debit card purchases or $400 in net spend purchases using your debit card per month. What’s more, the account requires no minimum balance. And though the attached debit card is available for use at more than 54,000 in-network ATMs, the credit union provides up to $25 per month in rebates for out-of-network provider charges.

Connexus also offers savings and money market accounts, as well as CDs that pay interest rates above 1% on balances of $5,000 or more. They also offer IRAs, consumer and business credit cards, auto loans, recreational loans, personal loans and lines of credit, student loans, and home financing.

Summary of the best credit unions

Credit unionAvailabilityIn-network ATMsAvailable productsBranch locations
Pentagon Federal Credit UnionAll 50 states68,000Checking and savings accounts, money market, CDs; home, auto, student, and personal loans; credit cards50
Navy Federal Credit UnionAll 50 states28,000Checking and savings accounts, money market, CDs; home, auto, student, and personal loans; credit cards341
Alliant Credit UnionAll 50 states80,000Checking and savings accounts, certificates of deposit, custodial accounts, traditional, Roth and SEP IRAs, as well as trust and custodial accounts; home loans, auto loans, RV loans, personal loans, commercial real estate loans, and credit cards14
Boeing Employees Credit UnionWashington, Idaho, Oregon, and South Carolina30,000Checking and savings accounts, a money market, CDs, IRAs, credit cards, home loans, vehicle loans, student loans and personal loans; business bank accounts and services50+
DCUAll 50 states80,000Checking and savings accounts, money market, CDs; home, auto, student, and personal loans; credit cards; business checking and savings accounts; business loans23
ConnexusAll 50 states54,000Checking, savings and money market accounts; IRAs; consumer and business credit cards, auto loans, recreational loans, personal loans and lines of credit, student loans, and home financing13

How I came up with this list

I started with checking the competition – looking for the credit unions that most frequently appear on “best credit union” lists. I then drilled down further, to look at the specific product offerings of each, as well as what each credit union specializes in.

Except for Boeing Employees Credit Union, each of the credit unions on this list makes their services available on a national level, even if they are only locally-based. They also offer all the services you would normally find at a bank, including checking and savings accounts, money markets, certificates of deposit, and loans of all types.

And naturally, greater weight was given to credit unions that specialize in a specific area. For example, Navy Federal Credit Union specializes in offering their services to active and retired members of the US military and their families. Boeing Employees Credit Union is practically unique in the credit union world, in that they do offer business services, bank accounts, and loans. 

Alternative banking options – to go with your credit union account 

As you can see from the above descriptions of services provided by credit unions, they’re not quite as comprehensive as those available at more advanced banks. But there are banking services that can be used in conjunction with a credit union relationship to provide those additional services.

Below is a list of those banking services you may want to consider along with a credit union membership. 

Chime

The 6 Best Credit Unions – These May Make You Want to Abandon Your Bank - ChimeReferred to as a “neo-bank”, Chime offers a combined savings and checking account, and operates entirely online. That is, there are no traditional brick-and-mortar branches behind this banking service. In fact, technically speaking, isn’t even considered a bank. Instead, it acts as the front-end experience for financial services.

The account comes with a Chime Visa® Debit Card that also helps you to save money. It does this using “round-ups”. That’s a process by which you make a purchase, and the amount charged to your spending account is debited for a rounded-up amount. For example, if you spend $6.25 on a purchase, your spending account will be charged an even $7. The extra $0.75 will be transferred into your savings account. And because it’s done automatically, you’ll be accumulating savings without even knowing it happened.

Chime is completely free to use, with no monthly fees or minimum balance requirements. Think of it more as a financial app that enables you to build your savings, and earn at least a little bit in interest.

Chime Disclosure - *Chime is a financial technology company, not a bank. Banking services and debit card provided by The Bancorp Bank or Stride Bank, N.A.; Members FDIC.
(1)Save When I Get Paid automatically transfers 10% of your direct deposits of $500 or more from your Checking Account into your savings account.
^Round Ups automatically round up debit card purchases to the nearest dollar and transfer the round up from your Chime Checking Account to your savings account.

 

Learn more about Chime or read our full review.

Novo 

The 6 Best Credit Unions – These May Make You Want to Abandon Your Bank - NovoNovo is a limited service fintech company designed specifically for small businesses and freelancers. It’s actually an independent tech company that’s partnered with Middlesex Federal Savings, a Massachusetts-based full-service bank.

Novo offers just a single account type, which is their business checking account. It requires $50 to open, but there is no minimum balance requirement thereafter. You can make mobile deposits into the account, connect it with digital wallets, accept foreign checks, and even send and receive international money transfers in multiple currencies. 

The account also offers integration with QuickBooks, Stripe, Xero, and TransferWise. It comes with a MasterCard business debit card that offers unlimited ATM fee reimbursements. One of the most compelling features of the checking account is that it has no fees, other than a $27 charge for non-sufficient funds for returned deposited items.

Learn more about Novo or read our full review.

Discover Cashback Debit

Best Checking Accounts For People With Bad Credit - Discover Cashback DebitDiscover is best known for their lineup of generous cashback credit cards. But they also offer a debit card providing cashback that’s one of the very best in the industry.

You can get the card by opening a Discover Cashback Debit Account. It’s the checking account to which the debit card is attached. You’ll be able to earn 1% cashback on purchases up to $3,000 per month, which will fetch you $30 in cashback. That means you can earn up to $360 in cashback by using the debit card over the course of one year.

In addition, the debit card will give you access to 60,000 in-network ATMs where you can make free-free transactions. 

The Discover Cashback Debit card can be another excellent supplement to a successful credit union relationship. Most credit unions don’t offer cashback debit cards, so the Discover Cashback Debit card can serve that function for you.

Learn more about Discover Cashback Debit or read our full review.

LendingClub Bank 

The 6 Best Credit Unions – These May Make You Want to Abandon Your Bank - LendingClub BankLendingClub Bank is an online, digital bank that provides both personal and business banking services. The service is available nationwide. They provide checking, savings, and CDs, as well as loans for both individuals and businesses that are offered through third-party partnerships.

The major feature with LendingClub Bank is their Rewards Checking, which provides you with a cashback debit card, that allows you to earn unlimited 1% cash back on purchases – in addition to interest on your account balance. What’s more, there are no monthly maintenance fees, and unlimited rebates for out-of-network ATM fees.

In addition, they offer small business banking, making LendingClub Bank an excellent choice for small and new businesses.

Learn more about LendingClub Bank or read our full review.

FAQs about credit unions

Credit unions offer consumer loans only, like mortgages, car loans, personal loans, and credit cards. On the other hand, banks offer consumer loans, but also commercial loans for businesses. Credit unions are also member-owned, while banks are shareholder-owned. And while banks operate to generate a profit for their shareholders, credit unions operate to return revenue to their members in the form of higher interest on deposit products and lower interest on loans.
Generally speaking, credit unions pay higher interest on deposits than banks. This gets back to the basic purpose of a credit union, which is to return revenues to their members in the form of higher interest rates on deposit products. For example, the average interest currently being paid on savings accounts with banks is 0.06%. The average interest currently being paid on savings accounts with credit unions is 0.13%.
Both credit unions and banks set certain minimum standards for loans, whether they are credit cards, car loans, personal loans, or home mortgages. However, since you are a member of a credit union – and not a customer, as is the case with a bank – you can generally expect more favorable consideration of your loan application at a credit union than at a bank.
No, since FDIC insurance extends only to bank deposits. However, credit unions are covered by a parallel US government-sponsored insurance agency, known as the National Credit Union Administration (NCUA). It similarly provides up to $250,000 of insurance against bank failure per depositor, per credit union. That’s the same coverage as the FDIC provides to banks.

Summary

Credit unions can offer you the same services as your bank does. You’ll be pleasantly surprised to find that they do it by charging lower fees – or no fees at all – and either paying you higher interest on your deposits or charging less on loans or credit cards. That’s because credit unions are nonprofit organizations that pass their business profits on to their depositors rather than shareholders.

And as a member of a credit union, rather than a customer at a bank, it’s often easier to get approved for a loan or credit card. Credit unions can be especially good institutions to get credit if you have a low credit score. They typically offer either secured credit cards or provide credit builder loans specifically to help improve your credit score. 

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About the author

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Since 2009, Kevin Mercadante has been sharing his journey from a washed-up mortgage loan officer emerging from the Financial Meltdown as a contract/self-employed “slash worker” – accountant/blogger/freelance web content writer – on Out of Your Rut.com. He offers career strategies, from dealing with under-employment to transitioning into self-employment, and provides “Alt-retirement strategies” for the vast majority who won’t retire to the beach as millionaires. He also frequently discusses the big-picture trends that are putting the squeeze on the bottom 90%, offering work-arounds and expense cutting tips to help readers carve out more money to save in their budgets – a.k.a., breaking the “savings barrier” and transitioning from debtor to saver. He’s a regular contributor/staff writer for as many as a dozen financial blogs and websites, including Money Under 30, Investor Junkie and The Dough Roller.