The Benefits of Credit Unions vs. Banks

There are seemingly endless organizations that are willing to take your money, with promises of high return on investment, easy accessibility, low fees, and innovative ways to save. It can be hard to determine which is best for storing your hard-earned cash.

Credit unions are nothing new in the banking world, but their simple approach to the money business makes them an ideal option for modern spenders and savers. Here are the benefits of using a credit union over a bank.

Not-for-profit Organizations

The primary difference that sets credit unions apart from banks is that they are not-for-profit organizations. That means that their primary goal is assisting you rather than helping themselves to your money.

When you use a credit union rather than a bank, you are a member and shareholder. You know that the interest you pay and the fees associated with accessing your money go toward paying to keep the organization operational, rather than funding a CEO’s third vacation home.

Services Match the Bank

One of the main reasons against credit unions in the past is that they didn’t have the resources to offer some of the innovative features large banks could. Now, however, technology is much more affordable and accessible for all, meaning credit unions can provide the same perks– online banking, for example– as big banks.

For example, Dane County Credit Union based out of Wisconsin has everything from online banking to paperless billing to Quinceañera savings accounts. You’ll often experience different overall customer service using a credit union as well. This ties directly into the fact that credit unions are non-profits and often run by a volunteer board in a community.

Save More Money

As credit unions are built to benefit you, you’ll find yourself saving more money by using their services. In many cases, credit interest rates are significantly lower than those offered by big banks. Since the credit union isn’t trying to be exceptionally profitable, they don’t have to inflate their rates. On the flip side, they often have higher interest rates on savings, so your benefit is twofold.

Many individuals are even getting their mortgages through credit unions to take advantage of lower interest rates on long-term loans. It is important to note that mortgage rates may vary based on your area, especially since big banks can be more competitive with their interest rates. Remember that you can have different accounts at different banks and credit unions to optimize your savings.

ATM Accessibility

In the past, ATM accessibility was also a struggle with credit unions. This is no longer the case. Many credit unions are a part of a wider network and allow fee-free transactions from partnered ATMs. This means that even if you’re across the country on vacation, you can access your cash without having to pay for the privilege.

Many credit unions also have enhanced accessibility in some areas. As big banks tend to gravitate toward strip malls, credit unions tend to be removed from the fray, giving them room to build drive-through banking and offer more tellers to service your needs.

Fewer Complications

Generally speaking, accounts and agreements at credit unions are less complex than those at big banks. You are less likely to get lost in the legalese and will have a better overall understanding of what you’re signing up for. Rather than pages upon pages of paperwork and fine print to read through when opening a savings account, you’ll know that this is your interest rate and this is how much money is required as a minimum.

Credit unions are an often overlooked option in the world of banking, with many people feeling compelled to go with what they know. Take time to compare the options offered by the banks and credit unions in your area and make the decision that fits.