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Banks vs. Credit Unions: Understand the Differences

Your financial health depends in part on your relationship with a trusted financial institution. Ideally, you want to partner with a financial institution that puts your interests and needs first. The right option offers the financial products you need and want, as well as helps you save money through lower fees and higher savings interest rates.

Understand the Differences     
Credit unions and banks both provide a variety of financial products and services, including checking and savings accounts, credit cards, CDs, IRAs, loans, and online access. The structure of both institutions differs, though. Credit unions are not-for-profit, member-owned cooperatives that prioritize member-care. Banks are corporations that offer numerous financial services but focus on profit for shareholders who may not have accounts at the bank.

Benefits of a Credit Union
Credit unions offer a variety of benefits. In general, you can expect to save more money and get better service when you become a credit union member. You’ll also receive access to these benefits and rewards:   

Bigger Savings      
As a not-for-profit organization, a credit union focuses on rewarding members rather than on making money. Plus, your savings and rewards increase as you fully utilize the financial services at your credit union and strengthen the cooperative.
      
The savings you can enjoy include higher interest rates on your savings, checking, money market, and other accounts. Credit unions usually offer free checking accounts with low fees, too, which means you may avoid expensive maintenance, transaction, minimum balance, or overdraft charges. You’ll also gain access to lower APRs and fees on loans, mortgages, and credit cards. 

Affordable Loans      
When you want to buy a house, upgrade your vehicle, or take out a personal loan, you want to find the best interest rate and terms. Check with your credit union first. In most cases, a credit union can provide better rates on loans than traditional banks. Credit union loans also feature lower fees, which saves you money as you pursue your life goals.

Flexible Services      
You and your story matter at a credit union, and employees will listen to you when you have a financial need. Maybe you want to open an account but only have a small deposit, employment gaps, or poor credit that may affect your ability to get a loan. Discuss your circumstances with a credit union representative and be confident that you will be heard. Flexible lending terms, no minimum balance requirements, and member-focused policies are a few of the personalized services you deserve. When you choose a credit union vs. a bank you access this flexible treatment whether you’re new member or a veteran member.  

Excellent Service      
If you value being more than a number, choose a credit union. Your money and your needs are prioritized, and you receive excellent service. When you open an account, apply for a loan, or discuss your retirement needs, talk to professional and educated credit union representatives. You’ll get personalized service, products, and answers that allow you to maximize your money and boost your financial health. 

Accounts Federally-Insured
The National Credit Union Administration (NCUA) insures credit union deposit accounts for up to $250,000. Like the FDIC insurance offered by banks, NCUA insurance gives you peace of mind that your money is secure and safe.      

Access Funds From Anywhere
Credit unions typically have smaller networks and a more local focus than big banks, but you can still access your money from almost anywhere at any time. Many credit unions participate in shared-branching, which allows you to complete financial transactions at partner branches across the country. You can also use surcharge-free ATMs nationwide. Credit unions offer technology that keeps you connected. Contact your credit union via telephone, utilize their online account access, or download their mobile banking app to manage your money and complete necessary financial transactions from anywhere, at anytime.

Member-Owned    
When you’re a member, you play an active role in making decisions that affect the credit union and its members. You can vote on certain initiatives, attend the Annual Meetings, and meet the Board of Directors who live locally and are credit union members/shareholders just like you. These are not options at a traditional bank where hired executives make decisions with the stockholders in mind. Rest assured, too, that your credit union leaders will work hard to serve you and prioritize your best interests as they guide the credit union. 

Community-Focused
Support your community when you join a locally-focused credit union. Here, individual members and businesses receive better account rates, favorable loan terms, and other member rewards that boost economic stability. As a bonus, credit unions often participate in local community events. Your credit union may sponsor youth sports leagues, local charities, or member-specific group initiatives and events that strengthen community vitality and health.  

Immediate Benefits      
Become a credit union member, and you can immediately access all of the benefits and rewards offered by the financial institution. Apply for a loan, open a CD, or start saving for retirement. While some credit unions do limit membership to certain geographical areas, professions, or associations; many now implement broader membership requirements. You can join a credit union with confidence and start saving money right away.      

Choosing a Credit Union vs. a Bank     
Meet your financial needs at a credit union. You’ll likely receive benefits that you can’t find at a big bank. Start strengthening and preserving your financial health and well-being today.

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