Bank vs Credit Union: Doing Your Homework

Bank vs credit union

It’s important to do your homework when choosing a financial institution to care for your hard earned money. There has been an ongoing battle between banks and credit unions that has lasted throughout the decades about which the better choice. In general, banks are larger and the average person may believe that larger must mean better, right? Not always. According to the Credit Union National Association, more than 100 million Americans currently use the banking accounts and services of 6,900 credit unions that range in size.

Let’s look at some of the key differences between banks and credit unions:

Credit Unions are governed by their members. Credit Unions have a board of directors made up of volunteers. While the board of directors are concerned with the financial well-being of the credit union, they are equally concerned with making sure the credit unions acts in the best interest of its members. Banks are owned by their shareholders, whereas credit unions are owned by their members. At a credit union, everyone counts.

Credit Unions are not-for-profit. Credit unions exist to serve their members, not to make a profit. Of course credit unions have to pay their bills, which include their staff, but aside from the basic day-to-day expenses, credit unions are not-for-profit. Because of their not-for-profit status, credit unions believe in people helping people. Your credit union will be there for you in both the good and bad times.

Compare fees and interest rates. Fees and interest rates are generally much higher at banks. On average, credit unions offer much higher rates on savings accounts, and lower interest rates on loans. Keep in mind that with a credit union, the interest a member pays on a loan is paid back to them in the form of higher dividend rates on certificates, savings, and other products.

Credit unions are known for their friendly service. Credit unions tend to be much smaller than banks, allowing them to add a personal touch to every day service. Credit unions pride themselves on getting to know and understand their members and their needs.

Ready to make the switch to a credit union? Find out more about Entrust Financial Credit Union at entrustfcu.org/membership, or open an account now by clicking here!