When looking for a place to do your banking, you might wonder about the differences between credit unions and commercial banks. While these two types of institutions are similar, there are some crucial distinctions you should be aware of before choosing one over the other.
This article will run you through all these important differences for their various services so you can be well informed on the contrasts between banking with a credit union vs. a commercial bank.
Differences in the Way Credit Unions and Commercial Banks Operate
Credit unions are not-for-profit organizations that are owned and controlled by their members. On the other hand, commercial banks are for-profit businesses that are owned by shareholders. Credit unions offer many of the same products and services as commercial banks, but there are some key differences between the two.
Credit unions typically have lower fees, offer higher interest rates on savings accounts, and maintain lower interest rates on loans. They also tend to be more flexible when it comes to loaning money since they are member-focused, meaning they exist to serve their members, not to make a profit. Commercial banks, on the other hand, are shareholder-focused, meaning their primary goal is to make money for their shareholders.
Credit unions are typically local or regional, while commercial banks can be national or even international. Credit unions are also subject to different regulations than commercial banks.
If you’re considering a credit union, it’s important to do your research to make sure it’s a good fit for you. You should look at things like fees, interest rates, and membership requirements. You should also make sure the credit union is insured by the National Credit Union Administration (NCUA). This will protect your assets in the event that the credit union fails.
When it comes to choosing between a credit union and a commercial bank, it’s important to consider your needs and objectives. If you’re looking for the lowest fees and highest interest rates, a credit union may be the better option. Whichever you choose, make sure you do your research to ensure you’re getting the best deal.
Eligibility Requirements for Credit Unions
In order to become a member of a credit union, you often must meet their eligibility requirements. Most credit unions have membership criteria based on employment, residence, or affiliation with a particular organization. For example, some credit unions serve only government employees, while others may serve members of the military or employees of a particular company.
To join a credit union, you will need to open a savings account and make a deposit. This deposit is your share in the credit union and gives you ownership rights. Once you become a member, you can take advantage of all the products and services that the credit union offers, including loans, checking accounts, and credit cards.
Credit Unions Offering the Personal Touch
Credit unions offer their members a personal touch that commercial banks cannot. When you join a credit union, you’re not just another account number or dollar amount. You’re a member of the organization with a say in how it’s run. This means that the people who work at your credit union are local and may even be people you know. They’re invested in helping you reach your financial goals.
The personal touch doesn’t stop there. Credit unions also tend to be more lenient when it comes to fees and charges. If you have a question or concern, you can pick up the phone and speak to a real person who will help you resolve the issue.
If you’re looking for a financial institution that will treat you like a human being, not just another account, credit unions are the way to go.
Banks May Have More ATMs
In general, banks tend to have more ATMs than credit unions. However, this does not mean that credit unions are always at a disadvantage when it comes to access to cash. There are several ways that credit unions can provide their members with convenient access to cash.
The reason credit unions sometimes have fewer ATMs than banks is that they are not-for-profit organizations. This means that they do not have the same amount of money to invest in their ATM network. However, this does not mean that credit unions are always worse off when it comes to access to cash. In fact, many credit unions offer free ATM access to their members through an ATM network. This means that you can use any ATM in the world without being charged a fee.
Some credit unions also offer mobile apps that allow you to deposit checks and get cash back without having to go to an ATM. This can be a great way to avoid fees if you are frequently on the go.
Save Money By Joining a Credit Union
Credit unions offer many of the same products and services as banks, but they are often able to provide them at a lower cost. This is because credit unions are not-for-profit organizations and do not have to answer to shareholders. Instead, they return their profits to their members with lower fees and better rates.
Credit Unions: The Right Choice for Many
Credit unions offer their members many benefits, including low-cost loans, personal service, and leniency when it comes to fees and charges. And even though they may have fewer ATMs, utilizing mobile banking to deposit checks or make changes to your account or using an ATM that is part of the credit union’s network.
After reading this article on credit union vs. commercial bank, if you would like to know more info on how joining a credit union may be better for you than a commercial bank, contact Solarity Credit Union today. With loan services, banking accounts, and a variety of benefits, their team can help you determine if a credit union is the right option for you.