You may be asking “What is a credit union” or “Is a credit union a bank?”
While credit unions and banks tend to offer similar products, there are many benefits of a credit union that could sway you to choose one over the other. So, let’s do a quick bank / credit union comparison to see how each measure up.
Why Use a Credit Union?
A credit union is a financial cooperative, meaning it is owned and operated by its members, as opposed to being owned by stockholders like banks. The initial deposit made into your account grants you part ownership of the credit union and can give you a say in the credit unions future decisions. With a strong focus on putting their members first, credit unions tend to provide a more personalized, higher level of customer service than banks.
Because credit unions are not-for-profit, they’re often able to offer better rates on loan products, credit cards and more. For example, last year, Michigan credit union members saved more than $375 million in better rates and lower fees. Here’s how:
- Savings on average of $200 on closing costs
- Paid 5% lower on credit card rates
- Paid 1% lower on auto loan rates
Many credit unions are also a part of a cooperative network that allows credit union members access to surcharge-free ATM’s all across the country.
Whether you choose a bank or credit union as your primary financial institution, you’ll have comfort knowing that your money is insured up to $250,000 per account.