While banks and credit unions offer nearly identical services and account choices, there are several differences. Because credit unions are member-owned and not-for-profit, they are more attuned to the needs of their members. There are five key differences.
1.) Account fees
To the unsuspecting consumer, big banks may not feel like they’re completely driven by profit. But while banks are happy to take your money, expect to get hit with steep maintenance fees once your account is up and running. The average bank charges consumers close to $150 each year for an open checking account. On the flip side, many credit unions offer free checking or make it easy to avoid fees.
2.) Overdraft fees
Sometimes you miscalculate the funds in your account and overspend. If you make this mistake on a checking account at a bank, get ready to cough up overdraft fees over $30 for each transaction. Most credit unions have fees that are a lot lower than banks.
3.) Fewer strings attached
Many banks won’t allow you to open a checking account unless you have a minimum balance of several hundred dollars. In contrast, 76% of credit unions have no minimum balance requirement.
4.) Credit unions are government-regulated
Both credit unions and banks are federally governed. A credit union that’s federally insured covers your accounts up to $250,000, just like a bank with federal insurance.
However, credit unions face more government restrictions on their investments and loans than banks do. This means that your credit union is super careful with how it invests your money.
5.) Superior service
When you’re banking with family at a credit union, you don’t have to worry about overworked tellers, curt managers, or representatives who are indifferent to your individual needs.
Since you’re a member/owner at your credit union, you’ll be greeted with friendly, familiar faces and representatives who care. They’re always ready and willing to help because they only have your best interests in mind.
Why choose a credit union for your checking account? With lower fees, fewer strings attached and better service, it’s the best place to park your money! Check out our Credit Unions vs. Banks video below to learn more: