Pricing a credit union account: a four-column worksheet

What credit unions cost depends on the individual institution, not on member ownership alone. Ownership by the members decides who receives the surplus. It does not lift legal limits either: under NCUA's aggregate member business loan limit, a federally insured credit union's net member business loan balances may not exceed the lesser of 1.75 times its actual net worth or 1.75 times the minimum net worth required to be well capitalized. Membership decides nothing about whether there is a charge, and a cooperative's fee schedule can run as long as any bank's. The structure is real, it is worth understanding, and it does not do your arithmetic for you.

This page takes the cost of banking at a credit union apart into its pieces. Fee amounts are set by each institution and change, so the worksheet here is built for your own schedule: the point is to know what each piece is, so you can find it on your own schedule and put your own figure beside it.

What to take away

Paid once

The route in. If the only way into the field of membership is through an association, joining it may cost something, and it may need renewing. This is a cost of banking at that credit union even though the credit union never bills it.

The share. Membership is held by keeping a deposit in a share account. It stays there as long as you are a member and normally comes back when you leave. It is capital, not a charge, but capital has a cost: whatever that money would have earned somewhere else. Ask whether the share earns a dividend. If it earns nothing, the cost is the full forgone return; if it earns something, the cost is the gap. The habit of pricing a balance you cannot spend is the same one described under business savings.

Setup. Some business services, such as originating payment files or positive pay, carry an implementation charge. These belong here rather than in the monthly column.

Paid while you are a member

Maintenance. A monthly charge with a waiver condition. Credit unions commonly express the waiver as a balance or an activity level, and the basis matters: a waiver measured on the lowest daily balance behaves very differently from one measured on the average. Test it against your own worst day, not your typical one.

Module charges. Online banking for business, bill payment, remote deposit, multi-user access, and treasury tools are sometimes bundled and sometimes priced per module. A low maintenance charge with several modules on top is a different account from the one on the summary page.

Dividends, in the other direction. Credit unions call the return on deposits a dividend rather than interest, because you are a shareholder. Treat it as a negative cost of the account and compare it the same way you would any yield: on the balance you actually hold, not the balance in the example.

Paid per event

These lines scale with how you use the account, so they can matter more as activity rises.

Check the schedule for possible per-event lines such as:

Not every credit union charges for each item, and the schedule may distinguish transaction types.

The shared-branch charge is easy to miss. Shared branching, offered through networks such as CO-OP Shared Branching, is a genuine convenience, but a business that relies on it daily should know whether each visit costs anything and whether every transaction type is available at another institution's counter.

Paid in access

The last column is the one no schedule prints: what the account cannot do, priced at what you do instead.

Access is not only a feeling, either. Price it with two questions: what the workaround costs each month, including the second account's own schedule, the balances it ties up, and its per-event lines, and how many hours a month the workaround adds. Both belong in the same four-column sheet as the scheduled charges.

None of these is a criticism of the model. They are simply where the cost of a cooperative sits, and a comparison that stops at the schedule misses them.

Reading the schedule of a cooperative

A credit union membership does not exempt you from a single line. Read its business fee schedule as you would a bank's: get it in writing, find the waiver basis, and list every per-event charge.

Ask about anything on your statement you cannot find. The taxonomy for doing that is set out on the banking fees page, and it applies here without change.

Where membership does help is at the margins. Surplus is returned to members through pricing, dividends, or both, and that often shows up as lower charges on some routine lines and better terms on loans. Often is not always. Price the specific institution against your own pattern before assuming the discount.

Putting it together

Settle the membership question first: whether you can join through an employer, an association, family, or a community, and whether the credit union will take the business. A cost comparison for an institution you cannot join is wasted work.

Write four headings on a sheet: once, monthly, per event, access. Under each, list the lines above that apply to you and put your own figure from the credit union's current schedule beside each one. Value the share at what the same money would earn elsewhere. Value access at what the workaround costs. Add the columns.

Then do the same for the alternative you are comparing against. The total is meaningful only if both sides include all four columns.

The one habit that matters

Never let "member-owned" stand in for arithmetic. The structure is real, the surplus does come back, and the schedule still has to be read line by line against your own pattern. What the structure changes in practice, beyond price, is a separate question from what the account costs.

Common questions

Is a credit union cheaper than a bank?

Sometimes, on some lines, for some businesses. It is not a property of the structure. The share deposit and any access gaps can reverse a headline advantage for an active or growing business.

Is the share deposit refundable?

Normally yes when membership ends, subject to anything owed. Confirm in the account agreement, and confirm what happens if the account is closed by the credit union rather than by you.

Why do they say dividend instead of interest?

Because a deposit at a credit union is a share in the cooperative, and the return on it is legally a dividend. For comparison purposes treat it as you would interest.

Are my deposits protected?

Federally insured credit unions are covered through the National Credit Union Share Insurance Fund, administered by the National Credit Union Administration (NCUA), with coverage counted separately per depositor, per institution, and per ownership category. Coverage depends on the credit union's insurance status and applicable rules; the NCUA explains what the coverage is and what it depends on. Some state-chartered credit unions carry private insurance instead, such as American Share Insurance. Find out which applies before you rely on it.