Most people agree it is better to put your money in a savings account rather than stash it under your mattress. But what’s the difference between a savings and checking account at a bank and at a credit union?
Credit unions:
- Member owned – Credit unions serve people who belong to a community with a similar interest such as location, employer, faith or shared membership in an organization. Anyone who opens an account with a credit union becomes a member, so the credit union is ultimately responsible for serving the people and communities who use the credit union.
- Customer-focused approach – As a member-owned organization, credit unions can offer lower rates for loans and credit cards. Credit unions often have lower fees than banks.
- Flexible – A member-focused approach means credit unions can work with members to offer loans or credit cards even if you don’t have a strong credit history.
- Fewer physical branches – Credit unions are often regional, so branches can be harder to find if you travel or move. However, many credit unions are part of a shared branch network that lets members of one credit union use the branches of other credit unions within the network. You can deposit cash, withdraw money, use surcharge-free ATMs, and conduct your regular business at these locations.
Banks:
- Investor owned – Banks are companies with a mandate to make money for their owners, investors.
- Many banks are national – This means many big banks have a wide network of branches. You can travel or relocate to almost any community and find a branch for one of the big banks.
- Resources for a variety of services – Banks often have a wider variety of choices than credit unions. As bigger organizations, they can offer more products, while credit unions may have only a handful of credit card, loan, checking or savings options.
The important thing is to find an organization that suits your financial needs. Do some research into your top choices to see if they have the services you need.