DEFINITION of State Employees’ Credit Union (SECU)
The State Employees’ Credit Union (SECU) is a nonprofit financial institution that is owned by employees of the state of North Carolina. The SECU was founded in 1937 and is the second-largest credit union in the United States, both in asset size and membership. As of 2017, SECU had $36.5 billion in assets and served more than 2.1 million members, who represent about 20% of North Carolina’s residents. The company also has almost 6,000 employees operating in 265 branches in all counties of North Carolina.
BREAKING DOWN State Employees’ Credit Union (SECU)
In the early stages of the traditional banking system, many people had no access to financial services due to certain constraints like high costs and geographic location. The high interest rates imposed by banks made it impossible for lower-income populations to receive financial services such as loans. Residents of small towns were also underserved because most banks were situated in the big cities, making basic banking products like checking accounts unattainable. Credit unions were formed in North America to promote financial inclusion for all residents at minimal cost. Because these unions are more concerned with providing easy access to financial services, they run as not-for-profit establishments and are therefore able to offer products with negligible fees and interest rates to their members. A credit union that has consistently offered low-cost services to its members since its inception is the State Employees’ Credit Union (SECU).
History of the State Employees’ Credit Union (SECU)
SECU was founded in 1937 by employees of the state of North Carolina. The union was formed to provide consumer financial services to state and public school employees and their families. As of 2016, SECU, in addition to consumer financial services offered to its members, also had an insurance division, investment brokerage, tax department, and estate advisory section that were all accessible to its members for reasonable fees and terms. Member deposits with SECU are federally insured by the National Credit Union Administration (NCUA).
As of 2016, the maintenance fee for a Share Draft Account (or Checking Account) with SECU was only $1 monthly, and the account offered an annual percentage yield (APY) of 0.25% on balances. SECU requires a $0 required minimum balance. A member who, for his/her first two days in any given year, has insufficient funds will be charged an NSF fee of $0. If the account isn’t brought back up to a positive after the first two days, the member will be charged $12 per transaction. Its Regular Share (Savings Account) which is a prerequisite for being a member, has an APY of 0.75%. Compared with the average national rates, SECU financial products are a great deal for its members. The 2016 national average survey on bank rates conducted in the 25 largest U.S. cities revealed that banks' NSF fee was $33, and checking and savings accounts' APY were 0.31% and 0.55%, respectively.
SECU’s investment accounts provide a means for members to save for retirement or education by providing low-cost diversified stock and bond mutual funds. Investment advisers assess a member’s goals and risk profile in order to choose the best mutual fund for the member’s tax-advantaged or taxable investment account. In addition to the SECU-recommended mutual funds, a member who prefers to invest in stocks, bonds, or nonrecommended mutual funds can do so online or with the help of assistance representatives. The traditional, Roth, and SEP IRA accounts have no service fees and transaction fee,s and have an annual asset-based fee of 0.25%, which is collected directly from the investment account. These accounts require a minimum opening deposit of $25. The national average asset-based fee that IRA holders pay banks in the US is 2% with a minimum deposit of $1,000.
SECU has a network of 1,100 ATMs situated in every county in North Carolina for debit card holders. Nonmembers with debit cards from a different financial institution are charged $1.25 for withdrawals from a SECU ATM. The national average fee charged to a noncustomer that uses an out-of-network ATM to withdraw money is $2.90, which is 132% more than SECU’s fees.
The SECU Foundation was founded to support community projects in housing, education and health care in the North Carolina. The $1 monthly maintenance fee that members pay to have a checking account with SECU is automatically transferred to the SECU Foundation. As of 2016, the foundation was involved in almost 60 initiatives and projects, some of which include the SECU Commons to provide housing for homeless families, youths soon to be out of foster care, and autistic young adults; Good Shepherd to provide permanent housing to seniors, veterans, and the disabled; A Chef’s Life to create awareness and provide support for local food producers; and the People Helping People Scholarship Program to send students to a four-year public university.