Introduction

Credit unions and banks offer many of the same services checking accounts, savings accounts, loans, so it’s often difficult to decide which type of institution to choose. This post will explore the pros and cons of both institutions to help you make an informed decision!

Why Choose a Credit Union?

Credit unions are significantly different than banks. First, credit unions are owned by their members and exist for them. A credit union focuses on what’s best for its members, which is not always true of banks. Secondly, all products offered by a credit union are underwritten by the member and not an outside company like a bank does. The main benefit is that losing your money should the institution fail is virtually eliminated if you’re in a federally insured institution.

Why Choose a Bank?

Banks typically offer more products than credit unions. For instance, many banks provide brokerage services, mortgages, and investment banking services. Some consumers turn to a bank in areas where the local credit union doesn’t have as much to offer. Additionally, most banks are insured by the Federal Deposit Insurance Corporation, while only certain credit unions are safe (check with your institution).

What to Consider When Choosing Between a Bank and Credit Union

1. What fees does the bank or credit union charge.

There are three main types of fees. The first is the membership fee, which is used to cover the expenses of administering the credit union. The second is a service fee, covering essential banking services like deposits, checks, and loans.

2. Types of services the credit union or bank provides.

The second most important factor is what services the institution provides. Some credit unions offer various products and services, while others focus on one particular area. It can make a big difference when deciding which institution is best for you.

3. Are there any special perks for the member.

Unlike banks and credit unions, thrifts do not charge monthly fees for maintaining an account. They also do not charge for online banking or bill payment services.

4. How many branches or ATM locations does the institution have.

The more convenient the institution is, the happier you’ll be.

5. Does the institution provide a wide range of financial instruments.

Finally, some people choose to bank with a thrift simply because they provide every type of financial instrument in one place, such as a credit union.

Conclusion

The bottom line is that you should consider all of your options when deciding between a bank or a credit union. You don’t want to make an uninformed choice, and you also don’t want to miss out on the services or special perks of the institution.