There are plenty of financial institutions that offer basic checking and savings accounts, lines of credit, mortgages and other loan products. Should the need arise, big banks may first come to mind, but local credit unions should top the list. When it comes to banking, making a choice based on a big recognizable name is typical, but it’s worth your time to research the differences between large financial institutions and small credit unions. Are they one in the same? How are they different? First, let’s get to the basics about credit unions.
Credit unions are not-for-profit financial cooperatives that exist to provide members with greater control over finances and better resources for achieving financial success. Like banks, credit unions offer the same services and products—your typical accounts, mobile banking, personal loans, mortgages and more. Aside from these primary features, there are other notable differences between banks and credit unions.
People with accounts big banks are regarded as customers. Customers have no ownership interest in the bank. The people who do own the institution may not even be customers, these individuals are simply investors and stockholders. On the other hand, depositors of a credit union are referred to as members, and they are part owners of the institution. This means they have the power to voice opinions on who is elected to represent them as board members.
Fees charged to customers account for nearly 1/3 of a bank’s’ total profits. As a not-for-profit financial co-op, credit unions typically charge fewer, and lower, fees than banks. Since every member is part-owner, earnings by the credit union are given back to them in the form of higher savings rates and lower loan rates.
Banks are largely competitive with one another which is why you’ll never be able to use another bank’s ATM without paying a surcharge. Credit unions share resources with other credit unions which mean accessibility and convenience for you. Credit union members can use any surcharge-free ATM in the network across the country. An added perk of going local? All decisions, from credit increases to loan approval, are made right inside our branch.
Credit unions provide the same host of services and products as a big bank, but at a much cheaper cost to you. Whether you’re shopping for a personal loan, auto loan, mortgage or credit card, interest rates offered are much lower than what you’d get at a bank. As for savings rates, credit unions typically pay you as much in interest as they can afford without losing money. According to Bankrate, credit unions pay nearly three times as much interest on money market accounts than banks. View current deposit rates and loan rates now!
One of the key ways credit unions stand out from big banks is in their member service initiatives. Not only is this in the form of higher savings rates, lower interest rates, and fewer fees, but educational programs and other resources that help you become more financially successful and achieve greater financial freedom.
Sure, you can join any financial institution, but why not go somewhere you’re regarded as more than a customer? At Partners Financial FCU, you’re a member. In addition to offering you all the services and benefits necessary to financial success, our goal is to provide the highest quality service for superior member satisfaction. Make a change for the better and become a member! For more information on our services and products, contact a member services representative at 804-649-2957, or visit a local branch.