Are you in the market for a new financial institution? If so, you’ve probably heard of credit unions but may not understand what makes them different from banks. Review some of the key advantages credit unions have over banks.
Better Interest Rates
Credit unions typically offer lower interest rates than banks on loans and mortgages and provide higher savings rates. The reason is that credit unions are not-for-profit organizations, and their proceeds go back to their members through better interest rates. When you request an auto loan or mortgage with a credit union, you can rest assured knowing you will get a great deal.
Banks have the primary concern of making money and expanding. While there is nothing wrong with trying to make a profit, poor business decisions have led mighty financial institutions to fall because of risky choices or fraud. With credit unions, the risks can be less, and credit unions are less likely to fail during economic hardships.
Friendly Community Atmosphere
Unlike big banks, credit unions are local, community-based institutions. When you visit a credit union, you’ll encounter people who know your name and genuinely care about your financial success.
Membership typically involves specific eligibility requirements, including residency or employment criteria in particular regions and industries. With these requirements in mind, credit unions limit membership to those within their focus areas to ensure that all members share a common bond.
Lower Account Fees
Credit unions typically have lower account fees than traditional banks. You may even find some accounts don’t require any monthly maintenance fee. Additionally, many credit cards issued by credit unions have no annual fees attached. This can be a desirable option for those just starting with their finances or trying to build up their credit score.
Members as Shareholders
Unlike banks that outside shareholders own, the members own the shares of credit unions. When decisions are up for discussion about how the business should operate or what type of services to offer, members can have direct input into the decision-making process through voting rights and other forms of participation in meetings or forums hosted by the institution.
Financial Education Resources
Credit unions also often host events, workshops, and one-on-one consultations with representatives to help educate their members about financial literacy topics such as budgeting, saving, and investing. This invaluable tool can help you make better financial decisions in the long run. Credit unions also offer educational material like pamphlets, newsletters, and online information for members to use as a tool for learning.
Access to Scholarships
Many credit unions offer scholarships to their members or their families. This can be especially helpful for students who may not have access to other funding sources for college tuition or other educational expenses.
Mobile Apps for Accounts
Banks often outpaced credit unions in the early days of mobile apps and software. Nowadays, credit unions typically have mobile apps that allow members to easily access their accounts from anywhere at any time, making it easier to keep track of your finances on the go.
Mobile banking apps are a revolutionary way to manage your finances, both securely and conveniently. They can allow you to view your account balances and latest transactions in real-time, transfer money within minutes, and pay bills effortlessly with the click of a button.
Some apps offer helpful features such as budgeting tools and automated savings plans. Additionally, numerous mobile banking applications allow you to talk to financial advisors virtually, granting you easy access to advice and guidance.
Federally Insured Funds
The National Credit Union Administration insures all deposits made at credit unions up to the government-mandated limits, making these institutions one of the safest places to store your money. The NCUA also works to enforce regulations to keep credit unions financially secure. While banks are also federally insured, they usually can offer no more security than a local credit union.
Credit unions can offer all the features of traditional banks with additional benefits. If these benefits sound appealing, consider checking out your local credit union!