Banks Vs. Credit Unions

Many credit unions have criteria you must possess in order to be eligible to join. Usually, they have fewer locations than banks and fewer lending services they can offer. However, credit unions pride themselves on their customer service and their focus on the community. Also sense their structure is that of a nonprofit organization they many times have lower interest rates and lower monthly fees. Many credit unions are part of a Co-op network for ATMs.

Perhaps one of the biggest differences is that credit unions are owned by their customers, which they call members. These members have a say in the credit union’s operations. Not only are the members part owners, these members can also sometimes benefit from little perks such as personal service as well as lower fees. They also offer safety, because the accounts are usually deposited in account covered by the National Credit Union Administration Insurance.

Banks on the other hand offer various financial services, but it must be considered that banks are a for profit organization and their clients have no say in the way they operate. Banks are owned by their shareholders and their job is to increase the wealth of their shareholders. Therefore, their client’s level of personal service is less important. Banks tend to have a larger selection of options for customers, government entities and corporations.

Banks tend to have more ATM locations than credit unions. They are backed by the Federal Deposit Insurance Corporation (FDIC). Though online banks may be an exception, banks tend to have higher fees and lower interest rates on some credit cards and deposit products. Because their focus is on their shareholders profits, they tend to be less community oriented.

Both credit unions and banks can be good for your everyday financial needs, they do differ in terms, and fees, interest rates and availability of some financial services. If you don’t mind the impersonal and their acting as if your money were theirs then banks may be right for you, but if you prefer to be recognized as a person and treated as an asset and have a little say in how things run then perhaps you may want to consider joining a credit union.

Note:  I am not sponsored by any company or person therefore the use for the products is my own and based on my personal empirical data. Images on this blog site are from a free source or taken by the author. No image or group of photos is intended to represent the people the author serves. The author does not care about Race (that is a politically correct term that he does not like because we are all of the same Race, the Human Race. He prefers the term ethnicity, color, religion, sex, gender, marital status, disability, genetic information, national origin, source of income, Veteran or military status, ancestry, citizenship, primary language or immigration status.) He is a service provider for all people. We will all rise together when we band together and help one another. Joseph Erwin is a Real Estate Broker, DRE # O2131799, and a CA general contractor # B 696662.  He resides in Southern California.