Where you keep your money matters, typically, except you decide to keep it under your bed, you have two options; either to take it to a bank or credit union.
On the surface, banks are credit union are similar, and are good options to save money. However, both options have their pros and cons.
If you want to know the most beneficial option for your money, then you should read this article to the end.
Understanding Credit Unions
A credit union as the name sounds is a cooperative that allows members to borrow pooled deposits at low-interest rates. Credit unions are non-profit organizations; their goal is to serve their members and the community.
They are usually based in a specific location. Credit unions are small and volunteers-run organizations with lots of members.
Why Choose A Credit Union?
These are some of the reasons why you may want to save or lend from a credit union.
Higher interest rates: Credit unions typically pay higher interest rates for savings and checking accounts. The amount is about four times what you will earn from a local bank. Other benefits include:• Lower rates for loan and credit card• Fewer fees on products and loans.• Better and more personalized services• Fewer complications – easy to follow terms• Offers more flexibility
Cons of Credit Union• Only available in a few locations• Have few products and online services
Commercial Banks
Banks are profit-driven ventures with the advantage of being in every corner, which provides effortless access to your cash.
Banks also have various tools to help you manage your account, including online banking and mobile apps.
Why Choose A Bank?• Banks have more branches across the country• Have Better technology • Offers more products and online services
Cons of Banks• Lower interest on deposits• High-interest rate for loans and credit cards• Exorbitant fees• Poor customer services• Numerous and challenging terms
Commercial Banks Vs. Credit Unions – The Difference
Credit unions are formed to serve the community, and isn’t profit-driven, while banks exist for profit.
To serve the community, credit unions charge fewer fees, while banks in their bid to make more profit introduce several outrageous fees.
Banks Vs. Credit Unions – Which One Is Better For You?
The answer to this question is dependent on what you want. Identify what matters to you. Do you want convenience or to save money?
If you are looking to save money, then Credit unions are the ideal pick. They offer great rates and services. However, there are very few branches available, which make accessibility difficult.
If you want convenience, then choose banks. They have branches all over the country, so you can easily access your money. Banks also provide a lot of tools that make it easier to manage your account.
Conclusion
Whether you choose a bank or credit union, it’s essential to always read through the agreement and ask about fees and hidden charges before signing any agreement.