The great debate as to whether credit unions or commercial banks are more advantageous to consumers rages on. Both offer distinct strengths and weaknesses to consider, depending on what your banking needs may be.
Credit Unions
The biggest benefit for considering credit unions is that credit unions are not-for-profit organizations. Account holders are members with stakes in the future of the credit union. This means that credit unions typically offer higher savings rates and lower loan interest rates to consumers making them attractive to consumers interested in budget-friendly banking solutions.
Credit union membership usually does, however, come with a few requirements. These requirements may be geographical, occupational, educational, or historical in nature.
Other benefits to consider with credit unions include:
- Federally secured deposits up to $250,000.
- Fewer fees related to banking (overdraft fees, ATM fees, etc.).
- Voting rights and the ability to run for the Board of Directors.
Credit unions also often represent a community or local population. While it does provide for that small-town feeling of everyone knowing your name, it also means you won’t see as many ATMs and branch offices (if any) while you’re on the road.
Commercial Banks
Commercial banks have board members to answer to when profits aren’t high enough. They make these profits by charging fees and interest rates to bank customers. The good news is that banks are open to pretty much everyone. You don’t need to live in a specific geographic region, attend a certain college, be employed for a specific company, or work in a particular profession in order to open a bank account.
Other benefits to consider when deciding on a bank vs. a credit union include:
- Commercial banks focus on aesthetics and customer service. The buildings are often meticulously-maintained and well-designed, and their employees go out of their way to provide you with top-notch service.
- Bank deposits are federally insured up to $250,000.
- Banks offer wider availability and access to branches and ATMs than credit unions. This makes traveling easier with a larger commercial bank rather than a smaller credit union.
Regardless of your specific preferences, the odds are good that you’ll find the services you need when you do business with a bank or credit union. Because each have their unique set of advantages though, you’ll have to decide the best match for your business needs or personal needs.