What is the real difference in banks and credit unions anyway? Are they the same? Some may be surprised to find that there are pretty big differences between the two.
When shopping around for a place to put your hard earned money, you may want to find out who owns the place. Banks are owned by investors. The bank is working for to help make those investors money. In contrast, a credit union is owned by the members. Therefore, if you are a member, in part the credit union is owned by you. Neither of these options is better than another. It all depends on what the consumer is looking for in a banking facility.
Taking a look at where the profits go is key. When business is done with a bank, the investors reap the rewards of earnings. Credit unions however are non profit entities. Profits from the credit union you might belong with are returned to the members of the credit union , not in the form of a check, but in lower interest rates and higher dividends.
A common misunderstanding is that a credit union is not FDIC insured. This isn’t necessarily true. Federal credit unions are required to be FDIC insured. If you are looking in to joining your local credit union , a simple call to find out their FDIC status is your best option if it’s important to you.
Not in all cases but in some nonetheless, there seems to be more personalized service for members of a credit union . Perhaps this is because credit unions seem to be smaller vs. a bank who caters to a large number of people.
Deciding on where to put your money can be a tough decision. Just as using a bank isn’t good for everyone neither is using a credit union the ideal option for some as well. The important thing to remember is to do your homework. Find out what your bank or credit union can offer you, shop around and ultimately you’ll be able to find a place you feel comfortable placing your hard earned paycheck.
Source by Heidi Ball
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