Credit unions offer low fees, high interest rates and better terms on loans than banks. They also give back to their members through charity and community programs. If you’re considering joining a credit union, you should learn about the differences between credit unions and banks to make the best choice for your financial needs.
The main difference is that Credit Union interest checking Hillsboro are nonprofit institutions owned by their members, while banks are for-profit enterprises. Unlike banks, credit unions can pass their profits on to their members in the form of lower rates for savings accounts, certificates of deposit and other products. Banks typically need to deliver an expected return on capital to their shareholders, however, so they’re less flexible in this regard.
In addition to lower rates, many credit unions have better online banking offerings than local and even some national banks. Some have free checking accounts, while others have no monthly fee at all (with certain requirements, such as having a minimum direct deposit or maintaining a certain balance). Additionally, many credit unions offer high-yield savings and money market accounts that compete with rates offered by banks. BestCashCow regularly compiles all these rates, and you can use our tools to find the best ones for you.
Another big difference is that credit unions have a different philosophy about serving their members. They’re usually more customer-friendly than banks and work hard to keep their customers happy. Clerks at credit unions often stay late to complete paperwork for loan applicants and answer questions, for example, and they may run special programs that help low-income people qualify for financing. Banks don’t place as much emphasis on their communities, and they may have fewer in-person branch locations than their competitors.
If you’re interested in joining a credit union, start by looking at the rates and fees offered. Compare the best offers from multiple institutions, including a few large credit unions that are nearby. Once you have your list, narrow it down based on other aspects that are important to you, such as the number of ATMs, the presence of branches or whether the institution offers robust digital banking features.
Before you choose a credit union, read the fine print to make sure it’s NCUA-insured. The NCUA is the federal agency that protects your deposits up to $250,000 (along with other protections). The National Credit Union Administration is the federal regulator that oversees the operations of credit unions. Its website has detailed information about how the NCUA protects your assets and offers tips for choosing an NCUA-insured credit union.
