All financial institutions may seem the same at first glance. Both banks and credit unions offer the financial tools you need to manage a busy life. But you want to partner with a financial institution that puts your interests and needs ahead of making a profit.
The right option offers the banking services and products you want and helps you save money through lower fees, lower interest rates on loans, and higher rates on savings.
Read on to find out everything you need to know about banks vs. credit unions and why so many people choose their local credit union over a major bank.
Key Differences: Banks vs. Credit Unions
The main difference between these two financial institutions is their structure. Banks are for-profit corporations that offer numerous financial services but focus on making money and distributing revenue to shareholders, who may not have accounts at the bank.
Credit unions are not-for-profit, member-owned cooperatives that prioritize member care and giving back to the local community.
Joining Criteria Can Be Different
Almost anyone can become a customer at a brick-and-mortar or online bank. You may simply need to show your ID and proof of address to open a checking or savings account.
On the other hand, credit unions are designed to meet the needs of members who share a common bond, so you may need to meet certain criteria before you can join. For example, you may need to live, work, worship, or go to school in a particular geographical area or belong to a specific profession or association to join.
That said, many credit unions now have more flexible membership requirements than in the past.
Products and Services Are Similar
Both credit unions and banks provide common financial products and services, including:
Share Certificates or Certificates of Deposit (CDs)
Individual Retirement Accounts (IRAs)
Loans such as Personal Loans, Auto Loans, and Home Loans
Online Access and Mobile Banking
Digital Services such as Bill Pay and Mobile Deposit
Credit unions may provide more financial education tools than banks because they want everyone in the community to succeed. You can confidently join Best Reward Federal Credit Union and start saving money immediately.
9 Benefits of Credit Unions vs. Banks
Credit unions offer a variety of benefits. In general, you can expect to save more money and get better service when you become a Best Reward Federal Credit Union member. Here are the top benefits and rewards you will get when you join a credit union compared to a bank:
1. Earn Better Returns
As a not-for-profit organization, a credit union focuses on rewarding members rather than on making money. Revenue that’s made from loans is passed back to members through higher yields on savings.
Plus, your savings and rewards will continue to grow as you use more financial products and services. Everyone at the cooperative grows stronger as part of a positive cycle.
Expect to enjoy higher interest rates on Best Reward products, including:
Share Draft Checking Accounts
Share Savings Accounts
Money Market Accounts
2. Fewer Fees
Credit unions usually offer free checking accounts, whereas banks often charge a monthly fee unless you maintain a certain balance.
Best Reward Federal Credit Union Share Draft Checking has:
No Monthly Service Fee
No Transaction Fees
No Minimum Balance Fee
Members of a credit union also gain access to fewer fees and lower fees on loans, mortgages, and credit cards, which saves you money as you pursue your life goals.
3. Affordable Loans
When you want to buy a house, upgrade your vehicle, or take out a personal loan, you want to find the best interest rate and terms. Check with your credit union first. In most cases, credit unions can provide better rates on loans than traditional banks because they are not-for-profit institutions.
4. Personalized Qualifying Process
You and your story matter at a credit union, and employees will listen to you when you have a financial need. Maybe you want to open an account but only have a small deposit, employment gaps, or poor credit that may affect your ability to get a loan.
Discuss your personal finances and circumstances with a credit union representative, and be confident they will hear you. When you choose a credit union vs. a bank, you access this customized treatment whether you’re a new member or a veteran member:
Flexible Lending Terms
No Minimum Balance Requirements
Treated as an Individual
5. Excellent Service
If you value being more than a number, choose a credit union. Best Reward Federal Credit Union prioritizes your money and needs, and you’ll receive excellent service. Talk to professional and educated credit union representatives when you need to open an account, apply for a loan, or discuss your retirement needs.
You’ll get personalized service, products, and answers that allow you to maximize your money and boost your financial health. Banks will offer centralized customer service but may not get to know you as an individual person.
6. Federally-Insured Accounts
The National Credit Union Administration (NCUA) insures credit union deposit accounts for up to $250,000. Like the FDIC insurance offered by banks, NCUA insurance gives you peace of mind that your money is secure and safe.
7. Access Funds From Anywhere
Credit unions typically have smaller networks and a more local focus than big banks, but you can still access your money from almost anywhere at any time. Many credit unions participate in shared branching, which allows you to complete financial transactions at partner branches across the country.
At Best Reward, you can use the following tools to manage your money and complete necessary financial transactions from anywhere, at any time:
When you’re a member, you play an active role in making decisions that affect the credit union and its members. You can vote on certain initiatives, attend the Annual Meetings, and meet the Board of Directors who live locally and are credit union members just like you.
These are not options at a traditional bank where hired executives make decisions with the stockholders in mind. Rest assured that your credit union leaders will also work hard to serve you and prioritize your best interests as they guide the credit union.
You get to support your community when you join a locally-focused credit union. Individual members and businesses receive better account rates, favorable loan terms, and other member rewards that boost economic stability in your area.
Plus, here’s how credit unions get involved in the community:
Participate in local community events that strengthen community vitality and health.
Sponsor youth sports leagues, local charities, or member-specific group initiatives
Choosing a Bank vs. Credit Union
When you become a credit union member, you can immediately access all of the benefits and rewards on offer. Apply for a loan, open a Share Certificate, or start saving for retirement.
Best Reward Federal Credit has all the tools you need to strengthen your financial health and well-being. Plus, you’ll likely receive benefits you can’t find at a big bank. Click below to access your member benefits!
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