Banks vs. Credit Unions
Banks and credit unions function in a similar manner. They both keep your money safe, invest it, make loans, and offer investment help.
The main difference between a bank and a credit union is that if you are a member of a credit union, you are part owner. Investors in a credit union are "members," not "clients" or "customers," and the administrators of a credit union are answerable to its members. Because credit unions are not-for-profit, they are under less pressure to make money through customer fees.
Credit unions might offer higher interest rates than banks on savings accounts, checking accounts, and certificates of deposit. Both credits unions and banks can be insured by government-backed funds--the National Credit Union Administration and the Federal Deposit Insurance Corporation, respectively--up to $250,000 per individual depositor.
Some people find that credit unions are more willing to lend to individuals, perhaps on better terms. However, some say that banks give borrowers faster and more efficient service. Banks also tend to offer a longer menu of products and services.
Membership in a credit union can sometimes be restricted, so you might not be able to join the one you prefer. Credit unions tend to have less money at their disposal than banks, so their technology might not be as powerful. For example, some still don't provide online services (although most do) and many don't provide round-the-clock customer service.
Banks are widely considered to be more versatile, and tend to be better capitalized. Which is the better choice depends on your individual needs, so shop around.
The main difference between a bank and a credit union is that if you are a member of a credit union, you are part owner. Investors in a credit union are "members," not "clients" or "customers," and the administrators of a credit union are answerable to its members. Because credit unions are not-for-profit, they are under less pressure to make money through customer fees.
Credit unions might offer higher interest rates than banks on savings accounts, checking accounts, and certificates of deposit. Both credits unions and banks can be insured by government-backed funds--the National Credit Union Administration and the Federal Deposit Insurance Corporation, respectively--up to $250,000 per individual depositor.
Some people find that credit unions are more willing to lend to individuals, perhaps on better terms. However, some say that banks give borrowers faster and more efficient service. Banks also tend to offer a longer menu of products and services.
Membership in a credit union can sometimes be restricted, so you might not be able to join the one you prefer. Credit unions tend to have less money at their disposal than banks, so their technology might not be as powerful. For example, some still don't provide online services (although most do) and many don't provide round-the-clock customer service.
Banks are widely considered to be more versatile, and tend to be better capitalized. Which is the better choice depends on your individual needs, so shop around.