Fundamental Differences between Credit Unions and Bank Accounts

When people think about where to open their financial account, they may wonder, should they go with a credit union account or a bank account? However, there are specific differences between these two accounts regarding the convenience factor as the credit union has great online services because it is a co-op member that is offering easy access to different branches and ATMs nationwide.

Credit unions and banks are known as the best financial institutions that provide quality services and products like loans and checking accounts in order to help people manage their money. Credit Unions are non-profit institutions that provide products and services to the member-owners only, while banks are for-profit organizations anyone can do business with. There are many people who still cannot decide which is the best option for opening a financial account as they do not know about the comparison of credit union account vs bank account.

Both of these financial institutes offer similar products, but they differ significantly depending upon how they operate. Here is a precise list of some fundamental differences between bank accounts and credit union accounts services.

  • For banks, no membership is required, while in credit unions, you need to have a membership first.
  • Banks are designed for only profit organizations that are publicly traded or privately owned, while the credit union is for the non-profit organization that its members own.
  • Banks generally have higher fees and lower saving rates, but credit unions have higher saving rates and lower fees.
  • Banks usually offer various financial products, while credit unions are pretty limited in the financial products that are being offered.
  • For banks, FDIC provides deposit insurance while NCUA provides deposit insurance to credit unions.

Why Choose a Credit Union?

Being a cooperative financial institution, it is the rule of a credit union to keep its members on priority. The credit union is mainly famous for its amazing customer service. When an individual visits any credit union branch, they will always provide great attention and commitment to that individual in order to meet his requirements. They also offer necessary financial education to their members as a part of their customer services.

People should first research the contrast of credit union account vs bank account before opening their financial accounts. Apart from the online articles and blogs related to financing on different banking websites, the credit union is aimed to hold in-person seminars regarding essential financial topics such as preventing identity theft, planning for retirement, buying a home, or real estate planning.

Why Choose Banks?

Banks are for profit organizations and are open to everybody who is interested in an account or a product. While getting an account in a bank, make sure that you do not have a bad banking history. Generally, banks have so many ATMs and branches available nationwide as compared to the credit unions, which makes it easier for the customers to access their money from any bank.

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