Is a credit union better than a bank?
Have you ever wondered if a credit union is better than a bank? The choice between the two will ultimately boil down to the different products, services, and fees each one offers and what components are most important to you as a customer. Let’s look at some key differences between banks and credit unions, so you’re able to decide which works best for you.
The fundamental difference between the two institutions is that a credit union is a not-for-profit institution owned by its members. Their mission is to provide their members with affordable financial services. Banks are corporations controlled by board members and owned by shareholders. Credit unions traditionally use their not-for-profit status to offer higher interest rates on savings accounts and CDs and lower interest rates on loan and credit cards.
One of the most noticeable differences is the discounted or absence of fees from many of the products offered by credit unions. At a time when many banks have raised their minimum balance requirements, the large majority of credit union checking accounts still do not require a minimum balance and don’t incur any fees. In fact, credit unions make every effort to keep their fees low, including eliminating products and services instead of adding fees. If you’re familiar with the fees that banks typically charge for direct deposits, transfers, wires, and balance transfers, you’re not likely to find them at a credit union.
It’s of the utmost importance for credit union representatives to establish a relationship with each of its members. If you’re looking for personalized attention, credit unions are less formal and work hard to deliver a superior level of customer service. It’s a people-centric business whose top priority is the best interest of their members.
Online and mobile functionality
For years, credit unions were substantially lacking in online manageability. Given some recent attention, however, many have made great strides in technology and what they’re able to offer. Members should have the ability to view account balances, initiate transfers and make online loan payments, which are the most requested transactions by online users. In addition, many credit unions offer a mobile check deposit feature that allows you to safely and securely deposit your check from your mobile device anywhere, anytime –all without visiting an ATM or a branch office.
The biggest benefit of a credit union membership is likely its loan products. Because of its cooperative structure and genuine concern for the financial well-being of its members, a credit union doesn’t have to charge high-interest rates to turn a profit. Generally, loans offered by a credit union are less expensive. Some even offer the option to skip a month’s payment without incurring a penalty.
A personal choice
Doing business with a bank or a credit union is a personal choice. Is it the financial perks, the online services, the style of service, and the number of branch locations that you value the most? Does the type of ownership, the size of the company and their mission matter to you? Weigh these factors to help you decide which option will work best for you and your hard-earned money.