Money is a necessity in today’s world. We all need checking accounts, debit and credit cards, Online Banking, and a safe place to save our money for the future. Both a bank and a credit union can offer all of that.
On the surface, there’s really no difference between a bank and a credit union. Both have branches, customer service, vaults, teller rows, federal deposit insurance, and boxes of free pens. And because we are all so mobile, most banks and credit unions offer mobile banking, on-the-go deposits, telephone banking and more.
But there are differences between the two that can help you decide if a credit union is right for you.
The Big Difference
Credit unions are not-for-profit financial institutions while banks are for-profit corporations. The members of a credit union work together, contributing to the overall success of the credit union for the betterment of the entire community. It’s like an economic democracy.
Banks, on the other hand, generate profits to pay investors. The investors and those in charge of the bank decide how to best use their profits to attract more customers and continually improve their bottom line.
Credit unions don’t make a profit, hence the term not for profit. But the money a credit union does earn from car loans, home loans, and prudent investing is used to improve savings rates, lower loan rates, offer additional banking innovations, and generally improve membership advantages.
Credit Union Members are Owners
When you join a credit union, you’re one of the owners. When you do well, the credit union does well. That’s why you’ll find credit unions hosting free financial education classes, offering products and services with low or no fees, and sharing advice to ensure you get the most from your membership and money. Credit union members are part of a close-knit financial family. You even get to vote for your unpaid, volunteer board of directors who guide the credit union.
Credit Union Members Earn More
You’ll find that most credit unions have better interests rates. That’s because a credit union doesn’t pay for-profit investors, they pay their members.
Credit Union Members Save More
Banks typically charge higher fees and rates. Credit unions focus on their members, offering lower loan rates than most banks, and finding ways to eliminate or reduce fees as much as possible.
Credit Unions are Full Service
Whatever you’re looking for in a bank, you’ll find an equal and often less expensive alternative at a credit union.
Bottom line: anyone can benefit from a credit union membership, whether you’re looking for financial products and services for your business, family, or non profit organization.
Need help finding a credit union near you? Try the Credit Union Locator here. If you live or work in Columbia, Clatsop, or Cowlitz counties in Oregon, look for St. Helens Community Credit Union. They’re ready to help you at shcu.org.