Have you ever sat there and wondered what is the difference between a credit union and a bank? Once you’re done reading, you will be well informed before you open your next account or before you open your very first! A Credit Union is a non-profit institution that offers members the access to checking and savings accounts, and much more. Since Credit Unions are a non-profit organization, they can offer higher rates and lower fees on their accounts but also have stringent eligibility requirements. In layman terms, credit unions are on the smaller scale and only available for people who qualify by certain eligibility requirements. But there are ways to join a credit union with no eligibility requirements, so be sure to check that out if you’re still interested in what credit unions have to offer!
Unlike Credit Unions, Banks are a for-profit institution with usually lower interest rates and higher fees. Banks usually have more incentives to join, such as higher bank bonuses than most Credit Unions and they are more widely accessible in terms of branches and ATMs. Banks tend to resonate more with consumers as they are well known “brand names” for a typical consumer to trust. Banks also can offer higher bonuses with account sign up due to the mass amount of resources they have on hand so yes, you get a bank bonus, but you do skimp out on the higher interest rates and lower account fees. But it all depends which one suits your needs more. Hopefully by the end of this post we hope to help you figure out if you want a Credit Union or Bank as your go-to bank stop.
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Credit Union Vs Banks – Differences
- Credit Unions
- Non-Profit Institution
- Higher interest rates, lower fees
- Personalized interactions
- Fewer branches than banks, but some participate in a shared branching network
- Bank
- For-Profit Institution
- Lower interest rates, higher fees
- Large national bank that has many branches across the country
- Often adopt new technology and tools quickly
Credit Unions Vs Banks – Pros & Cons
Credit Unions offers many financial perks that you can benefit from, such as better interest on savings and fewer fees. But it does comes with the downside of less availability and locations. Additionally, some credit unions have limitations to their membership and not all credit unions necessarily have better rates than commercial banks. Check to see Credit Unions with No Eligibility Requirements for the best credit unions to join with no eligibility requirements. The pros of credit unions are the family atmosphere you get when you bank with them with the personalized interactions and the higher interest rates that you are able to earn on your money saved there. But it comes with quite a hefty price if you travel a lot due to the limited branches and ATM locations so you might be paying quite a bit in ATM fees for a short trip away from home. You also might fore-go some of the technology and convenience that comes with banks as some credit unions do not provide an app to control your account at the tip of your fingers.
Banks offers the same financial perks as you see at a credit union and then some. At a bank you will also receive the convenience factor of banking with a well known bank that offers plentiful branches and ATMs nationwide. Along with the convenience factor, you also get services such as QuickPay, P2P, etc. where you can spot a friend when you’re splitting a dinner meal and you’re short on cash. You get tons of tiny perks that makes this day and age accessible, such as mobile app access, all day deposit, and you’re life is a breeze with a smart phone in your hand. Banks also offer quite the nice sum when opening a bank account, there are so many so make sure check out our Best Bank Bonuses and see different interest rates and bonuses for Credit Unions and Banks to help you decide which one is best for you!
Credit Unions Vs Banks Conclusion:
In the end, make sure to research the specific Credit Union or Bank you plan to open an account and compare their rates and/or bonuses. Even though most Credit Unions generally offer higher interest rates, Banks can often have specials that beat out these Credit Unions or may even be higher to start with. Depending on your circumstances and how you’re living, be sure to know which one will help you more, a credit union or a bank. If you have any comments you’d like to add be sure to do so below. Check out our Best Reward Checking Accounts and our Best Savings Account today!
