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Most people have an account at a financial institution of some kind, usually a bank or credit union – in fact, well over half of the world’s population engage in banking services according to Gallup. That also means over half the world’s population has been in a situation when you’re in an area where you can’t find any branches or ATMs. At times, it can be difficult to gain access to your money; at best, you’ll often pay exorbitant fees at an ATM operated by another institution.
If you belong to a credit union, you might have another option available to you. It’s called shared branch co-ops. If you don’t already belong to a credit union, shared branches might be a good reason to join one. But first, let’s talk about what a credit union is.
What’s a Credit Union?
Credit unions, like banks, offer a place for you to store your money, have your paycheck deposited, cash checks, and perform other banking functions. Where credit unions differ, however, is in how they’re owned. When you deposit money into a bank, the bank uses that money in loans and withdrawals to other customers. So when you make a withdrawal, they use other customers’ deposits to give you back your cash.
In a credit union, when you make a deposit you’re actually buying shares of the company; credit unions are owned by the members. They’re often smaller and regional as well, or designed to serve specific niches of the population (such as employees of certain companies or the military). This typically means a more personalized service and more flexibility when it comes to your accounts. In addition, credit unions are not-for-profit, which means as a member-owner you’ll get dividends each year as part of your benefits.
The drawback to a credit union, however, is that you might have a hard time accessing your money if you’re not near the local branch. ATM fees can also be costly, since most credit unions – especially smaller ones – may operate fewer ATMs than a traditional bank. Some credit unions, however, participate in a shared branch co-op, and that allows them to do a lot more – no matter how small they are.
How Does the Co-Op Program Work?
Shared branch co-op is a group of credit unions that have entered into a cooperative agreement to serve each other’s member-owners. There are currently more than 1,800 credit unions – totaling over 5,000 branches – participating in the program, as well as Shared Branch ATMs in all 50 states. The sheer availability of shared branches means the biggest advantage banks have over credit unions – convenience when away from your home – is no longer as big of an issue.
Shared Branch participant institutions are capable of handling many of the other member institutions’ transactions, including:
- Balance inquiries
- Loan payments and advances
- Traveler’s checks, official cashier’s checks, and money orders
That means if you’re a member at one participating credit union, you can visit another participating credit union and do many of the same transactions there that you can do at your home branch – with a few caveats.
What Are the Drawbacks?
In order to have another participating credit union handle a transaction on your account, you need to have your account number. While they can look up specific accounts, tellers can’t search for your account the same way your home branch can – and that’s for your protection. You’ll need to have identification as well; while you might be able to get away with not having ID in your local branch if everyone knows you, that won’t be the case elsewhere.
You should also be aware that there may be fees for using shared branching services. Those fees, if any, will be levied on your account by the home credit union. If you’re purchasing instruments such as traveler’s checks, cashier’s checks, or money orders, those fees are typically levied at the time of purchase.
Why Would I Want to Join a Co-Op Participating Credit Union?
Even with some of the downsides of Shared Branches, the ability to perform financial transactions away from home can be a huge plus. While most financial institutions have a 24-hour hotline for lost or stolen ATM cards or other emergencies, sometimes it helps to be able to walk into a friendly local branch and talk to a person face to face if something happens.
If a credit union sounds like a better banking option for you, make sure to ask whether they participate in the Shared Branch Co-Op, and ensure the possibility of more access to your money wherever you are.
Author: Jeff Gitlen