Where you park your funds can have a long-term impact on your financial health. Banks and credit unions both have advantages, and comparing the two can help you find the one that suits your needs best. Read on for our guide to comparing banks and credit unions.
Consider Available Options
Creating a list of banks and credit unions in your area is the first step to a good comparison. Having a brick-and-mortar branch at hand is helpful for face-to-face problem resolutions. It’s also a great option if you prefer staying away from customer service helplines.
Check Features
You’ll need to check out the features offered by different banks and credit unions. These could include interest rates, ATM network availability, online tools, service fees, and minimum required balances.
Comparing the Two
Your preference for a bank or credit union mainly depends on your financial needs. Let’s take a closer look at each to understand the differences and how you can benefit from choosing either.
Banks
Banks today range from small regional organizations to massive financial institutions. A bank operates on a for-profit basis and typically offers a more comprehensive range of services than credit unions. They also have a more extensive network of ATMs and physical branches. With access to better funding, banks can adapt quicker to newer technology and offer dedicated tools to manage your finances. Newer online banks now offer essential banking services with better interest rates and lower fees than traditional banks. When it comes to ease of access, banks come out on top.
Credit Unions
These are financial entities created to serve a community. These non-profit institutions comprise a group of members who each own a share of the credit union. The credit union’s working model involves passing on favorable loan rates and better interest to their members instead of profits. Most credit unions offer similar services as compared to banks, but they have limited ATM networks. If you’re looking for a hands-on approach to attain a financial goal, you may want to consider a credit union.
Once you have your financial priorities set, you can use the above information to make a sound choice between a bank and a credit union.
