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CO-OP Shared Branching: A Credit Union Perk

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Credit unions offer tangible advantages over for-profit financial institutions. They reinvest their earnings where it matters most: lower costs and higher rates for their members.

A perceived downside of credit unions can be their limited service areas. If you’re a member of a credit union in southern California, for example, what do you do if you need to visit a branch while traveling to New York on business? The CO-OP shared branch network was designed to address this deficiency.

Customers of CO-OP member credit unions can visit the branches of any other member credit union to conduct business. Even better, they have access to thousands of fee-free ATMs nationwide.

If you’re interested in joining a credit union but still have reservations about branch or ATM access, find one that’s a member of the CO-OP network, and you’ll rarely be far from a branch or a fee-free ATM you can use thanks to shared branching.

What is CO-OP shared branching?

Back in the early 1980s, credit unions faced a new threat to their business model. The big for-profit banks were building out their ATM networks, and credit unions with few branches felt they couldn’t offer a similar level of access to their members.

In 1981, a group of credit unions in California founded CO-OP Financial Services, figuring that joining forces to offer a big network of ATMs would effectively meet the challenge. Over time, CO-OP evolved to offer even more services, including shared branching.

Today, CO-OP has evolved into an organization that boasts one of the largest networks of bank branches in the United States, second only to Wells Fargo. Over 1,800 individual credit unions belong to CO-OP, with 5,641 shared branches and 30,000 ATMs.

With CO-OP’s shared branching service, you can walk into any partner credit union branch around the country and conduct your banking business in person just as if it were your home branch.

Banking services available with shared branching

  • Surcharge-free ATMs
  • Deposits
  • Withdrawals
  • Loan payments
  • Account inquiries
  • Transfers
  • Cash advances, if you have a line of credit

“It’s extremely unique to the credit union industry,” said Kathy Snider, group owner of Engage Products at the CO-OP Financial Services. “It’s a huge valuable asset, because think about it: big banks really don’t go ‘Hey, I’ll let you use my branches.’ It just doesn’t happen.”

You should do some quick research before you join a credit union. Many — but not all — credit unions belong to the CO-OP shared branch network. Some credit unions can be located in difficult-to-access spots, such as inside of job site, warehouse or factory, for example.

“The fact of the matter is, and the research backs this up, people still like to have the option of going to a branch,” said Snider. “Shared branching helps support that need for a credit union being able to say, ‘Sure, you can do digital, you can go to your home branch or you go into a shared branching location.’”

Financial institutions with the most bank branches in the U.S.
OrganizationNumber of branches
Wells Fargo5,872
CO-OP Financial Services5,641
JPMorgan Chase5,144
Bank of America4,474
U.S. Bank3,131
PNC Bank2,481

How does shared branching compare to the big banks?

The biggest benefit of shared branching is that it allows credit unions to compete on an even footing with big nationwide banks, but still offer the same small-town service that has become the hallmark of credit unions.

“We do business with primarily tech companies. Some of our largest customers, Microsoft, Amazon, Intel have employees all over the country, and all over the world for that matter,” said Ed Powers, vice president of membership and business development at First Tech Federal Credit Union. “We have over 40 branches, so we’re not a small credit union by any means. But we’re currently centered on the West Coast. So, when we need new members that are East Coast centric, we’re able to help them, at least in the United States, through the CO-OP network.”

Similarly, many credit unions find that the CO-OP ATM network has been very useful. “We have over 250 ATMs,” said Kim Lybecker, director of Retail Delivery Market Expansion at BECU. “But in the CO-OP network, there’s over 30,000 [ATMs] nationwide and that’s one of the things that helps us compete with the larger banks and the larger financial institutions with much larger networks.”

Shared branching customer benefits

There are a lot of times when CO-OP shared branching and its ATM network may come in handy:

  • Travel: If you’re on vacation in the U.S. and you need some more cash, you can easily get it.
  • Moving: Even if you move clear across the country from your regional credit union, you can still access your account at any number of partner credit unions in your new location.
  • Emergencies: If you have to evacuate your home because of a disaster or natural emergency, you can get easy access to your cash to tide you over at a partner credit union or ATM
  • Convenience: Even if you’re just around your home town or city, the CO-OP service makes more fee-free ATMs available to you.

Why you should consider credit unions

Credit unions have a lot of advantages over traditional banks beyond CO-OP network access to branches and ATMs.

If you have poor credit, you may find that credit unions are more willing to work with you to get a loan or a line of credit. Many credit unions even offer financial checkups or financial education to help you learn more.

If you’re looking to join a credit union that is a member of the CO-OP network, it’s a good idea to do your research ahead of time. You can find member credit unions on the CO-OP website.

It’s important to know that not all credit unions are open to everyone. Most credit unions serve a defined group of people. You may need to live in a certain geographic area, be employed with a given employer or meet other criteria to join. Some credit unions allow you to join by becoming a member of a partner nonprofit organization for a small fee. If you qualify for a CO-OP network member credit union, you’ll never be far from shared branching services.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Lindsay VanSomeren
Lindsay VanSomeren |

Lindsay VanSomeren is a writer at MagnifyMoney. You can email Lindsay here

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How Do Banks and Credit Unions Make Money?

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Banks and credit unions share some broad similarities: They help their customers borrow money, build savings and invest for the future. Both credit unions and banks make money by charging interest on loans and charging fees for banking services. But their business models are very different in many ways, mainly in regards to what they do with their profits.

Banks are for-profit enterprises that serve all and any customers who come to them, and distribute profits to shareholders. Credit unions are not-for-profit institutions that only serve people who become members, often by requiring them to meet certain membership criteria. Credit unions reward their members with bonus dividends or lower-cost services, rather than redistributing earnings to investors.

How banks and credit unions make money

Banks and credit unions both make money by lending out a portion of their deposits, charging interest on those loans and collecting fees and charges for various financial services, such as investing and wealth management.

Interest on loans

The most significant source of profits for banks and credit unions is charging interest on loans to consumers. Common types of loans offered by banks and credit unions include mortgages, home equity lines of credit (HELOCs), auto loans and personal loans, said Ken Tumin, founder of, a LendingTree company.

Banks pay interest on deposits — checking accounts, savings accounts and certificates of deposit — but the interest they earn from making loans is typically higher than what they pay for deposits. In the banking business, the difference between these two types of interest is known as the “spread.”

If a bank pays out 1% interest on $200,000 worth of CDs, and receives 4.5% interest on a $200,000 mortgage, the difference — the spread — is how the bank makes money. Banks have to comply with rules on how many loans they can make relative to their asset bases.


Another way that banks and credit unions make money is by charging consumers fees for a variety of services, Tumin said. Commonly charged fees include:

  • Overdraft fees: Overdraft fees comprise 60% of the fees charged by banks, and they tend to fall disproportionately on lower-income customers. Banks and credit unions charge these fees when you don’t have enough money to cover your payment or withdrawal. Fees can run as high as $36 per overdraft transaction.
  • Interchange fees: Banks and credit unions charge merchants fees when you use your credit or debit card, which are known as interchange fees. If a consumer makes a purchase, money is withdrawn from their account — and the merchant pays a fee to both the bank and the credit card company for the transaction.
  • Checking account fees: Monthly fees may be associated with a checking account, or fees may be levied if a consumer doesn’t maintain a minimum balance in the account.
  • ATM fees: If you use another financial institution’s ATM, you typically pay a fee to do so, which goes into that bank or credit union’s pocket.
  • In-branch service fees: If you need a cashier’s check, money order, notary or lock box storage, banks charge per-use or annual fees for these services.
  • Document fees: Banks may charge a fee to pull historical bank records pre-dating a certain time period or to provide print copies of cashed checks. Banks may also charge fees for check printing or paper statements.
  • Loan origination fees: Banks charge fees to “originate” loans, including home loans and personal loans. Loan origination fees may be a one-time flat fee or a percentage of a loan. They may sound low (1%, for instance) but can actually be substantial when considering the total size of the loan.
  • Late fees: Banks charge late fees when borrowers pay credit cards, mortgage loans, personal loans and other forms of debt past the bill’s due date (or past a grace period, which is a few days past the due date). When a checking account is overdrawn, there may be additional late fees if it is not brought back to or above $0 swiftly.
  • Early withdrawal fees: Those who open CDs at banks will pay early withdrawal fees if they withdraw funds before their certificate’s term expires. These fees can cut into earnings from a CD.

Financial services

Many banks offer financial advisory and wealth management services. Institutions charge either a percentage of assets under management or per-transaction brokerage fees.

Many banks offer private banking services to high-net-worth consumers, charging an annual management fee as a percentage of the assets under management. Banks also offer access to investment products for customers in lower wealth brackets.

Credit unions cannot offer financial advisory or wealth management services directly, so they provide them by affiliating with partner registered investment advisors or registered broker-dealers. Credit unions offer these services as a benefit to consumers who want investing advice, and they may make money indirectly through referral fees or other partnerships arranged with an investment advising company.

What do banks and credit unions do with their profits?

Credit unions do not have to pay taxes since they are not-for-profit organizations, which means they avoid one major expense that banks need to pay. Additionally, because credit unions are owned by their members rather than by shareholders, they aren’t focused on generating profits for shareholders like banks are. Often, credit unions return profits to their members as dividends, or they may offer reduced fees or better interest rates on loans or deposit accounts, which can, in turn, attract new members.

Banks, on the other hand, are owned by investors and operate as for-profit institutions. They use their profits to provide returns to shareholders (especially if they’re publicly traded, as most larger banks are), and to pay state and federal taxes, which they must pay as for-profit organizations.

How online banking impacts banks and credit unions

Brick-and-mortar banks and credit unions have been facing more and more competition from online banks. Online banks tend to charge lower account fees than credit unions and pay out higher interest rates on deposits, said Tumin.

While online banks don’t have physical branch locations, they nonetheless offer a compelling proposition to consumers. In response, brick-and-mortar banks are beating them by joining them, offering online banking services of their own to address competition from apps and other tools, which threaten to reduce payment-related revenue by as much as 15% by 2025, according to a report published by Accenture, a professional services firm.

Going forward, banks’ business models will have to change to accommodate the anticipated reduction in fee income. But while these tools may not add revenue for banks, they could potentially lower branch operation costs, which are substantial. By putting more power in consumer hands, a big bank could reduce its branch count, branch hours or individual branch teller staff hours.

“For banks, these tools may be more about cutting back on expenses than adding revenue,” Tumin said.

For credit unions, providing these tools offers the conveniences that banks, which typically have larger branch networks, present. Since credit unions aren’t driven to provide returns to shareholders on Wall Street and are instead driven to manage so that their members receive benefits and favorable rates, credit unions can choose which services are for benefit versus for profit.

Are banks or credit unions better for your money?

Now that you know how banks and credit unions make money, you may be wondering which option is best for your money. As with most financial questions, the answer largely depends on what’s most important to you.

Online banks offer the most compelling savings account rates, with the average savings account interest rising from 0.79% in mid-2017 to 1.52% by the close of 2018. During that time period, traditional banks and credit unions also increased rates, but only to 0.26% and 0.23%, respectively. Pair this with their low-fee checking accounts, and online banks are a compelling option for many consumers, although a lack of branches may deter some people.

Brick-and-mortar bank networks may be more convenient, offering more branches and more sophisticated online banking and investing options. These benefits are positives for some busy consumers, but the convenience comes at a cost — especially when it comes to overdraft and other fees.

“Credit unions may be more consumer-friendly,” Tumin said, citing their low account fees and balance minimums. Because credit unions are member-owned and locally driven, they may give back to their communities and their members. However, they are not open to everyone, as a consumer generally can’t join a credit union for aerospace or military members if they’ve never worked in those fields, for example.

The bottom line

No two consumers need the same things from their bank or credit union, so it pays to research how accounts and fees are structured and which additional services are available. While credit unions and banks make money in similar ways, including through interest on loans and fees that customers pay, they don’t handle profits in the same way.

Where that money is reinvested — in discounts to consumers, or in profits for shareholders — is a key differentiator between credit unions and banks. If you’re going to entrust an institution with your money, it pays to know how that institution ultimately makes money.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Jane Hodges
Jane Hodges |

Jane Hodges is a writer at MagnifyMoney. You can email Jane here

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Credit Karma Savings Account Review

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Credit Karma is the latest fintech company to jump on the mobile banking bandwagon. The company is now offering a free high-yield savings account, which is somewhat of a departure from the product it’s most famous for: providing consumers with access to free credit checks.

Credit Karma joins a slew of firms—including SoFi and Betterment—that have recently rolled out cash management accounts of their own. Credit Karma Savings will offer a generous 1.90%  APY, and the company says it will leverage technology to keep its rates competitive. Credit Karma is partnering with a network of banks to hold your deposits and gain Federal Deposit Insurance Corporation (FDIC) insurance.

What is Credit Karma Savings?

Expected to launch later this year, Credit Karma Savings is a high-yield savings account that will be accessible through the company’s app. Credit Karma claims it will take consumers just “four clicks” to get started.

Once signed up, deposits will collect an APY of 1.90%. That’s 22 times more than the current national average of 0.09% for savings accounts. Credit Karma says it will leverage technology to keep that rate moving competitively, so that consumers won’t have to monitor rates themselves to ensure they’re getting the most for their money.

There are no fees or minimums required to open a Credit Karma Savings account, and deposits up to $5 million are insured by the Federal Deposit Insurance Corporation (FDIC). To achieve this, Credit Karma partnered with MVB Bank to provide banking services, and it will be utilizing a network of over 800 banks to hold deposits.

However, it’s important to note that the amount that is actually insured is dependent on whether you already have a balance in a partner bank and how much that balance is: “Actual insured amounts may be lower or adversely affected based on any balances you hold at a network bank,” Credit Karma said.

Credit Karma Savings vs. other cash management accounts

Credit Karma joins the ranks of other fintech companies that have recently launched high-yield savings accounts or cash management accounts for consumers, all boasting no fees and no minimum balance requirements. Here’s how Credit Karma Savings stacks up against companies with similar products.

Bank APYNumber of partner / network banks Amount FDIC insured

Credit Karma Savings

1.90%1 partner bank with network of 800+ banks$5 million

SoFi Money

1.60%7 program banks$1.5 million

Betterment Everyday Cash Reserve

1.60%11 program banks$1 million

Wealthfront Cash Account

1.82%9 program banks$1 million

Savings accounts with higher interest rates than Credit Karma Savings

Credit Karma Savings’ 1.90%  APY is certainly nothing to sneeze at, especially when looking at other fintech companies that offer similar high-yield accounts for stashing your cash. But other savings accounts—particularly those at online banks—boast even higher rates. Vio Bank, for example, currently has an online high-yield savings account with an impressive APY of 2.07% , while HSBC Direct Savings touts a 2.05% APY.

The bottom line on Credit Karma Savings

Credit Karma Savings offers a number of attractive incentives, like a competitive APY, no fees and a high maximum amount of $5 million that’s eligible for FDIC insurance. If you already have a Credit Karma account, the convenience and ease of being able to open a Credit Karma Savings account isn’t a bad perk, either. If your main goal is to rack up as much interest as possible on your savings, though, a number of online banks offer higher-yield savings account offerings.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Sarah Berger
Sarah Berger |

Sarah Berger is a writer at MagnifyMoney. You can email Sarah here