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Credit Unions vs. Banks

Apr 25, 2017 - Posted by: Rocky Mountain Credit Union

When it comes to choosing a place to keep your money, one of the most important decisions is which type of financial institution to use.  You may simply need a place for a standard checking, savings, or credit card account.  Or you may want to find a financial institution to invest your money or be able to utilize for home, vehicle or personal loans.  Whichever the case, there are many benefits to choosing a credit union over a traditional bank for your banking needs.

Credit Unions are Cooperatives, Not Corporations

Unlike banks that a for profit entities, credit unions are nonprofit and their shareholders are their members.  It is therefore the goal of the credit union to pass on the profits they earn back to the customers through interest rates, costs, and other member benefits.

ATM Transactions are Free

Credit union ATM cards are typically accepted by multiple credit unions in the area, and the best thing is they do not charge a processing fee.  With some locations charging as much as $4.00 per transaction, this can amount to a significant savings throughout the year.

Low Interest Rate Credit Cards

Credit unions offer credit cards, just like any other banking institution, but unlike a traditional bank, their interest rates tend to be significantly lower.  Where banks may charge anywhere from 19 to up to 28% interest, credit union interest rates tend to be around 7 to 15% on average.  Additionally credit unions typically do not charge a penalty interest if there is a missed or delayed payment.

You Make More Money

At a credit union, checking and savings accounts, CDs and money market accounts will pay their customers a higher interest rate than a traditional bank.  For example many credit unions offer almost 40% more on their checking interest rates than the national bank average.

Low Rates on Loans

Since credit unions are non-profit, their interest rates on personal, home, and vehicle loans will have a lower interest rate.  The profit that credit unions make will go back into to the customers pocket through these interest rate savings.  Additionally, because their goals are customer instead of profit driven, credit unions will look more at your ability to repay as a whole instead of simply basing your loan approval on your credit score and income.  Vehicle rates on average can be as much as 2 to 3% lower than banks.

Their Service Have Less Strings Attached

The products offered by credit unions will have a lot less requirements than a traditional bank.  Many banks require minimum balances and limit the number of transactions that are allowed per month.  If you exceed these limits, you will incur fees or be unable to complete more transactions.

They are More Welcoming

One thing many customers note about their credit union is that they feel like they are a part of the family.  Credit union employees are encouraged to maintain personal relationships with their customers.  This helps customers feel more appreciated as well as helps them feel like more than a number.  Credit unions often try to foster this family friendly environment by holding or sponsoring events, such as Easter egg hunts and neighborhood luncheons

They are Part of the Community

Credit Unions are a part of the community they serve.  They are not only there to provide for their customer in the area, but also to help in the community as well.  Often times credit unions will offer some education programs and services.  Most credit unions will sponsor scholarships for education available to local students.

Put your money where it can best help you and the community you live in, by banking at your local credit union instead of a corporate bank.  Not only will you save more money on interest rates and fees, you will also make more on your investments and invest in your community as well.

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