Credit unions and commercial banks have one major difference. Credit unions are not-for-profit financial institutions that exist to serve members and pay them dividends, and banks are for-profit institutions that pay declared earnings to stockholders only. Credit unions aren’t for everybody, however.
When deciding whether to hitch a depository financial institution, consider its pros and cons before choosing one over a bank. When it involves credit unions versus banks, it’s really a private decision. Review your financial situation to ascertain whether a depository financial institution works for you, then explore the various sorts of credit unions to hitch.
Advantages of Credit Unions
One of the advantages of a depository financial institution is that you’re not just a customer, you’re a part-owner. You’ll get top-notch customer service, voting rights and dividends.
You’ll recover rates. A depository financial institution will get you lower rates on loans and typically enable you to earn more on deposits than traditional banks. Because credit unions are nonprofits, they expire surplus funds to customers within the sort of higher interest rates on deposit accounts.
You’ll pay lower fees. Credit unions also expire savings to members within the sort of lower fees. meaning you’ll be saving two ways — on lower fees and discounted loan rates.
Better customer service is standard. Credit unions typically provide superb customer service. Because they have a tendency to be smaller organizations than banks, depository financial institution employees can get to understand members and specialise in their needs.