Are you trying to decide where to do your banking? Overwhelmed by the multitude of choices and wondering just what is the difference between banks vs. credit unions?
Don’t worry, it’s not as complicated as it looks at first.
While there are a lot of similarities between the two organizations, there are some major differences too that could have an effect on which one is right for you. Do you need access to ATMs wherever you go? Are you going to be moving anytime soon? Who has the lowest fees?
Continue reading to sort through some of the differences and see which one is the best choice for you.
Differences Between Banks vs. Credit Unions
One advantage of big banks is that they have more local branches and ATMs. This is a big convenience for customers. No one likes to pay out-of-network ATM fees or have to drive for miles to their bank.
Having access to more locations is a big advantage if you move to a different neighborhood – chances are good you can still find a local branch of your bank nearby. If you travel abroad frequently, you are less likely to have problems using a credit or debit card from a big international bank.
Newer Technology at Regular Banks
A bank will often have more money to spend on technology. As a result, they can upgrade their services faster than a credit union can. With convenient mobile banking services, 24/7 customer service phone lines, and online websites, a person can choose to do as much online banking as they want.
Yet, most banks still have the convenience of a local brick-and-mortar office nearby whenever they want. It’s the best of both worlds!
Diverse Product Offering
Banks often offer a larger array of financial services, including different types of checking and saving accounts, loans, and credit cards. In addition, they usually have a bigger selection of investment products and more business accounts and services. When you work with a major bank, you can keep your whole financial life under one roof.
Anyone Can Be A Customer
Credit unions are a membership-based business. In order to join, you have to belong to a certain population – live in a certain area, work in a certain industry, belong to a certain religious organization.
This is not the case with a bank. Anyone can open an account at a bank. If you’re looking to switch to a new bank you can easily do so.
Improved Customer Service
For years, most people agree that credit unions provided better customer service because they are smaller organizations with fewer customers. But in recent years, banks have begun to beat out credit unions on national customer satisfaction surveys.
Both Offer Similar Insurance
Whether you choose a bank or a credit union, rest assured that your deposits are insured up to $250,000. The Federal Deposit Insurance Corporation (FDIC) provides insurance for banks, while the National Credit Union Share Insurance Fund (NCUA) insures credit unions.
Making Your Decision
There are a lot of different factors when deciding between banks vs credit unions. They both have advantages and disadvantages. But if the convenience of locations and easy access to ATMs are important or having more services available, then working with a bank might be the right choice for you.
Check out other articles on our blog to learn more about managing your personal finances.