Why Choose a Credit Union Over a Bank
For some individuals, credit unions will be a far better alternative than banks when applying for low-interest loans, building credit, and achieving long-term financial goals. However, many people don’t know what a credit union is, what it does, and why they choose a credit union over a bank.
There are some key differences are worth knowing as you’re weighing fees, types of accounts, and products side-by-side. Let’s learn why you would choose a credit union over a bank.
Credit Unions Are Non-Profits
A credit union is a non-profit institution owned by members collectively. As non-profits, they are orchestrated to serve their members more helpfully and effectively than an institution like a bank, which simply views each account as a customer and not as a part of the organization.
They Connect You to Your Community
A credit union is typically regionally based. It may be advantageous for an individual or small business owner to integrate themselves regionally, meeting other members and contributing to a community-oriented organization.
You Vote On Credit Union Policies
As a member and part-owner of the credit union, you can vote on credit union policies and participate in decisions. If there are aspects of operations you don’t like, you can propose a change and seek support to make that change across the organization.
Credit Unions Have More Flexibility
As you will discover when you’re interacting with customer service and in your early days as a member, flexibility at a credit union is a lot more present than what you receive at a bank. This applies to loans, accounts, and more.
Credit Unions Are Not Trying to Make Money Off You
Banks make their money by profiting from their customers and investors. A credit union is not like that. A credit union is member-owned, which means it serves itself to keep fees low and profits high, reinvesting revenues back into the member-owned institution.
Credit Unions Have Lower Fees and Interest Rates
Credit unions don’t have the same fee structure as a bank or offer equal interest rates. Credit union members stand to benefit from lower-than-average interest rates and fewer fees. This can be tremendously advantageous if you make many moves within your accounts that normally accumulate expensive bank fees.
You Save Money at a Credit Union
According to estimates, the total savings annually for a credit union member is roughly $129. That’s money you get to keep and not put towards fees or unnecessary banking expenditures.
Credit Unions Offer Access to ATMs and a Branch Network
Though not all do, many credit unions have ATMs nationwide and shared branches that allow you to do financial transactions and access your accounts from anywhere.
More People Are Joining Credit Unions and Leaving Banks
There are nearly 14 million credit union customers in Canada, and more people are joining daily to get better service and rates than banks have offered for so long.
Credit Unions Offer Chequing and Savings Accounts
Credit unions offer the same type of general accounts as a bank. This includes chequing and savings accounts. They operate in the same way as they would at a bank. The only difference is they are supplied and serviced by a credit union.
Higher Yield on Savings Accounts and Products
Enjoy higher deposit yields and get more money when you put your savings into an account with a credit union.
All Deposits Are Insured Just Like They Are with a Bank
Most credit unions, if not all, insure members’ deposits up to $250,000 per member, just like any bank does. There is nothing any less authoritative or legitimate with a credit union. They operate like a bank but are personalized and treat their customers as members rather than numbers.
They May Offer Financial Educational Resources
Credit unions are often more encouraging about educating their members on financial literacy and providing insight into saving money, investing, and planning for their financial future. There is a real element of care and education, with some offering seminars, free articles, financial calculators, and similar tools.
14. Credit Unions Provide Loans And Investment Accounts
Credit unions often provide members with various loans and investment accounts like banks. While some are limited in what they provide, members can enjoy the benefits of these products and others, allowing them to save for retirement, borrow, and control their finances just like they would with a bank.
15. Credit Unions Save You Money On Loans
Many people first discover credit unions when trying to take out a loan, i.e., an auto loan, a mortgage, or a personal loan. For example, the closing costs for home mortgage loans are generally less, and loans are often provided at major cost savings to the member.
