The Credit Union vs. the Bank
Is A Credit Union Better Than A Traditional Bank?
If you’re not already a credit union member, you may be wondering what the difference is between your local credit union and your local bank -- or perhaps you’re not really wondering at all and you assume they’re pretty much the same. You may be surprised to find out that there are indeed some very substantial differences between credit unions and banks including the way they operate and who they work for.
The Owners
First and foremost, when you’re looking at which institution to bank at, you should take a look at who owns the establishment. When you bank at your local bank, the institution is owned by investors and the bank works to make those investors money. When you bank at your local credit union, the institution is owned by the members of the credit union and if you’re a member the institution is owned, in part, by you. Therefore, the credit card is, in essence, working for you.
Where Do The Profits Go?
Another big difference between credit unions and banks is where the profits go. When you’re doing business with a bank, the investors of that bank are reaping the profits of the institution. However, credit unions are non-profit entities. When you’re doing business with a credit union the profits of that credit union are being returned to the members of the credit union in the form of lower loan interest rates and higher dividends.
FDIC Insured
Many people are leery of putting their funds in the hands of a credit union because they believe the credit union isn’t FDIC insured. This isn’t necessarily the case. All federal credit unions must be FDIC insured. If you’re interested in banking at your local credit union, simply call them to verify that they are indeed FDIC insured.
Personalized Service
While this isn’t the instance in all cases, I have often heard that people who are members of credit unions receive more personalized service than those who are members of large banks. Because credit unions tend to be smaller and cater to a select group of people, there is more personalization between the staff and the members.
While banking at a credit union isn’t for everyone, it’s definitely something you should consider looking into. See what service and opportunities your local credit union can offer you.