The choice between a bank and a credit union is largely a matter of preference. For example, banks offer more convenience when it comes to managing money, while credit unions offer higher interest rates and greater access to services such as mortgages and car loans. If you value community ties and a sense of belonging, you may want to choose a credit union. Here are three reasons why.
A major difference between a credit union and a bank is location. Banks are typically larger with more locations, while credit unions tend to be local. A big bank’s nationwide reach allows you to take advantage of fee-free ATMs and convenient locations. But some people prefer a credit union’s personalized service and higher rates on savings accounts. This can be a good option if you’re relocating, or you’re looking for a low-cost, local alternative.
Your priorities will determine which type of financial institution is best for you. Some people prefer a local brick-and-mortar location, while others want convenience, fewer branch hours, and higher interest rates. While large banks and credit unions may offer more services and technology, smaller credit unions may not. The difference in location is not always apparent. Depending on your priorities, you may be better served by an online-only bank or a credit union that offers a wider variety of services.
Banks and credit unions offer similar services. However, the two institutions differ in a few key areas. For example, banks tend to restrict membership to individuals with a Social Security number, while credit unions do not. In addition, credit unions tend to offer lower interest rates on loans than banks. However, this does not mean that credit unions are less competitive in terms of product and service.