| and Credit Unions are financial institutions that offer a | | | | savings and no highly paid administration, they are able |
| number of services to their customers such as loans | | | | to provide such services as: free checking accounts, |
| and money accounts. Many people do not realize that | | | | savings accounts with high interest rates, and low |
| there are a number of differences between a bank | | | | rates on auto loans, mortgages and credit cards. Up to |
| and a credit union. When deciding if you should do your | | | | $100,000 of a member’s money is insured and |
| banking at a credit union or bank, it is important to | | | | regulated by the National Credit Union Association, |
| understand the differences so that you can choose | | | | which is the same as the Federal Reserve |
| the financial institution that meets your needs. | | | | Bank’s coverage. One downside of a credit |
| Credit Unions | | | | union is that there are not as many as traditional bank |
| When credit unions were first established, they were | | | | branches. |
| cooperatives that helped workers with financial | | | | Banks |
| troubles. Now, credit unions are community based | | | | Banks are owned by a private company and are |
| institutions which operate as a non profit institution. | | | | publicly traded for-profit institutions. The Board of |
| According to Bankrate.com, "Credit unions have | | | | Directors is appointed by the company or |
| topped the consumer satisfaction ratings in American | | | | shareholders. They are locally based but have |
| Banker’s annual survey for 12 years in a row." | | | | numerous branches across a broad region. Rates, |
| Anyone in the U.S. can join a credit union. If you want | | | | fees, and penalties are generally higher than credit |
| to have an account at a credit union, you are required | | | | unions. They tend to have more of a selection of |
| to have a membership. Members are equal part | | | | products and services. Bank account holders will |
| owners and receive shares based on their contribution. | | | | receive some interest on a particular account. Their |
| The more one contributes the more shares and profits | | | | services are customized to all of their customers and |
| they receive. The Credit Union Board of Directors are | | | | not individualized. The interest rates on loans are |
| made up of volunteers or elected members from the | | | | generally higher than credit unions. Banks have more |
| community. Credit unions promote saving and spending | | | | ATMs, branches, and investment products and |
| money carefully. | | | | services. Banks tend to finance projects that will give |
| Credit unions will often offer finance education | | | | them a big return on their investment. |
| programs to their members. They are also exempt | | | | Both banks and credit unions have government |
| from most state and federal taxes. Credit unions will | | | | guarantees on a certain amount of funds in a |
| normally finance community development projects. | | | | customer’s account, making them safe. When |
| Interest rates tend to be lower than bank rates. Since | | | | choosing between a bank and a credit union, |
| every member is an equal owner, service is more | | | | customers have to consider their own unique current |
| individualized and friendly. As well, because of the tax | | | | and future needs. |