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Hey Mom and Dad, what’s a credit union?

teenage girl outside a school on a skateboard

If your kids are reaching the age where they’re ready to open a savings account, they may be aware that the word “bank” has some negative associations associated with it.

The repercussions of the financial recession are still reverberating through the culture, and the reputation of big banks have not fully recovered. So if your eager young savers are wondering why they should trust their hard-earned allowance to a bank, you can explain that a credit union isn’t a bank.

But how do you explain to kids that a credit union is so much more?

Well, a credit union is a not-for-profit financial cooperative, so its foundational principles include things like helping the community and educating members. But that’s a difficult concept for a kid to understand.

So keep it simple. 

Tell them the credit union is a friendly place where people come together to help each other save and lend money. And unlike a bank, a credit union doesn’t want to take your money and use it to make more money for people far away on Wall Street. Instead, the credit union is there to help them—and their friends and neighbors—make good money decisions.

Ultimately, a credit union exists to make them and their community stronger.