The Federal Reserve has used several interest rate increases in the last year to stabilize the U.S. Economy. Your financial situation and your savings may have changed depending on how much you owe. It’s worth looking into whether you are still receiving the best rate.

Compared to big banks, credit union offers decent rates for borrowing or stashing cash, particularly during economic downturns.

Andrew Leventis (chief economist at the National Credit Union Administration or NCUA) says that people looking for loans can often find credit unions with lower rates. Credit unions will spend some of their profits on lower rates. “That’s one of the ways credit unions have historically helped their members, especially in times when rates are rising and it’s more urgent to get the best deal span>

What you need to know about these non-profit cooperative financial institutions, and how they can help you save big.

Credit unions: How they work

Credit unions are not owned by shareholders. Instead, they return all of their profits to members.

Although they offer many of the same services and products as banks, some might be called something else. A checking account might be called a “shared draft account” or a “checking account.” Credit unions can also be members of an ATM network, which allows them to make transactions outside the boundaries of a particular branch.

Credit unions generally allow you to join regardless of where you live, work, or worship. You can also join through a relative or make a small donation for a charity partner organization.

Jim Norris is the president and CEO at SkyPoint Federal Credit Union. The institution serves several counties in Maryland, Washington D.C. and Virginia.

Usually, there is a one-time fee to join a credit cooperative, sometimes as low at $5. This may be used for opening a savings account.

Compare credit union rates

Credit union members get back their profits in the form low fees, higher interest rates on loans, and higher savings rates.

Rates for particular products may vary from credit union to credit union. According to data retrieved by the NCUA using S&P Global Market Intelligence databases (a provider of financial information services), the national average rate for a classic credit card was 11.96% at credit cooperatives and 13.34% in banks during the quarter ended December 2022.

While rates at credit unions may be lower, they can still rise if the Fed increases them. Norris states that rates at SkyPoint Federal Credit Union are adjusted automatically within a month using Fed rates. However, there is a limit.

Federal law sets a 15% interest rate for most loans and credit cards at federally chartered credit cooperatives. However, the NCUA can temporarily increase that limit “if interest rates could threaten safety or soundness of individual credit Unions,” according an NCUA bulletin. The 18% cap has been maintained by the NCUA for many years. It will be extended through September 10, 2024.

The Fed’s interest rate increases do not affect the cap. This can make it useful for borrowers who have variable rates. Credit union credit cards can help lower your costs if you have a tendency to carry a balance.

Depending on the account, credit unions might offer higher savings rates that big banks. According to the NCUA’s data, the national average rate of a 5-year certificate of deposit was 2.3% in the quarter ended 2022. This compares with 1.58% at banks. Online banks are likely to offer higher savings rates, while credit union rates allow you to have multiple accounts under one roof if that is your preference.

Other credit union perks

Members also get their profits back through educational programs. SkyPoint Federal Credit Union works with a credit counseling agency, to assist members who are struggling to pay their debts. SkyPoint offers Banzai, which is a financial education program designed for students.

Jayah Kaisamba, a Texas credit union member, has seen many programs at his institution.

He says that they do a great job of educating consumers. Therefore, they offer webinars and in-person sessions for financial education.

Credit unions might offer additional savings options. SkyPoint Federal Credit Union offers savings accounts that can be used for various purposes, including holidays or special occasions.

Kai-samba has similar options at his credit union for saving money for specific goals, such as vacations, home costs or holidays. Each paycheck is automatically set up to pay each account.

Kai-samba states that he can separate it and it shows me how far I have come in each of the accounts.

This article was written and published originally by The Associated Press by NerdWallet.