The Best Credit Unions for Federal Government Employees

US Capitol Building at sunset, Washington DC, USA
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Credit unions are great options for your banking needs. Typically smaller than big banks, they often offer great customer service, lower interest rates on loans, lower bank fees, and higher interest rates on checking and savings accounts. What’s more, they offer many of the same products and services as the nation’s largest banks.

There's a catch, of course, in that you have to be eligible for membership in order to set up an account.

Fortunately, many credit unions have relaxed membership requirements in recent years. Especially if you work for the federal government, you’ve got several options available.

If you aren’t physically located near any of the credit unions below – don’t worry. They might still serve your needs. When credit unions are part of the shared branching network, you can access your account from thousands of credit unions across the country (visiting the branch of another credit union to make deposits, withdrawals, get cashier’s checks, and more).

No matter which credit union you choose, make sure your deposits are insured by the full faith and credit of the U.S. government for maximum protection. Federally insured credit unions meet this requirement.

The financial institutions below are great options for employees of the federal government and the military (including family members). They get very good reviews from satisfied customers, and they offer competitive products.

Pentagon Federal Credit Union

The Pentagon Federal Credit Union or "PenFed" basically allows anyone to join. If you're a member of the military, a US Government employee, an employee at an "eligible place of business" or an American Red Cross employee/volunteer, you can join.

Don't fit into one of the categories?

Don't worry. Family members of any of the above can join, too. If all else fails, the bank allows membership for those who belong to the National Military Family Association or the Voices for America's Troops Foundation, available for a $14 one-time fee to any US citizen – you can join this organization when you open your PenFed account online. Pentagon Federal's options for banking and lending are extensive, and the credit union offers some great online banking features to boot.

Navy Federal Credit Union

Navy Federal serves the Army, Marine Corps, Navy, Airforce and Department of Defense. To join, applicants must work for one of these organizations or be a family member of an eligible employee. While most credit unions extend memberships to immediate family only, Navy Federal allows grandparents and grandchildren to become members. If either of the above requirements fits your situation, take advantage of Navy Federal's great rates on everything from car loans to fixed interest credit cards.

Fortune magazine ranked it one of the best places to work in 2008, and membership is at over six million and growing. In early 2011, Navy Federal merged with the USA Federal Credit Union.

One extra perk of Navy Federal is 24/7 phone support.

PenFed also has generous customer service hours, but Navy Federal comes out ahead if you’re a night owl.

Opening a Credit Union Account

To open an account at a credit union, you’ll need to qualify as a member, as described above. In some cases, that’s as easy as making a donation to an organization associated with the credit union (you become a member of the organization by donating, and that makes you eligible to become a credit union member as well).

Next, you’ll need to provide basic information about yourself, such as your Social Security Number, physical address, and a valid government identification document.

Finally, you’ll open a “share” account, which officially makes you a member. In many cases, this means you have to deposit between $5 and $20 (which the credit union will set aside) for the duration of your membership.

Banks for Government Employees

Credit unions aren’t always better than banks (although both types of institutions often offer the same types of products and services). Shop around to make sure you get the right fit for your needs. Although most banks accept anybody as a customer, there are exceptions. USAA Bank is popular among military families, and the bank consistently gets good reviews for customer service and competitive rates. Joining USAA requires that you are active military, former military, cadets or midshipmen, or family of those individuals.

Note: this article was updated by Justin Pritchard.