Regular banks and credit unions share similar services like
auto loans, checking and savings accounts and mortgages. But the difference
between them is that “customers” of a credit union are considered members and
they own the institution. While regular bank accounts are simply a company.
They aim to “maximize profits” for shareholders. Credit unions focus on the
members needs and try to provide credit at reasonable rates.
There are multiple pros and cons for these services. For
example credit unions typically pay higher interest rates on all deposit
accounts including savings, money market and checking’s. While some online
banks offer rates close towards credit unions, the rates range from four to ten
times the amount in interest you’d receive from local commercial banks. Also
offering lower fees, many credit unions provide checking accounts with minimum
balance and without a monthly account service charge.
Some disadvantages to owning a
credit union would be fewer options for different checking’s and savings
accounts and Less host of loan and investment products. There’s also
inconvenience with less locations, having less physical branches and a sub-par
online banking system that also present poorly online services.
