More and more savers and borrowers are looking into other options aside from big banks, and this is where credit unions come in.
Similar to banks, credit unions also allow its members to have savings and loans. They also enjoy other bank account facilities, but these are non-profit organizations. The money that credit unions earn is being used to lend to members.
Credit unions are operated by its members and are run for the members, which is why they are called member-centric institutions. There are no shareholders to earn from its profits, and members are the ones who are considered to be part owners.
Credit unions also do not offer fees for arrangement deals. The system for loans is easy and fair. They even look at how affordable these loans are for the members. This means that for members whose credit history are not very good, they can still be eligible for loans and are also qualified for an appraisal, depending on their ability to pay it back.
Many Americans trust credit unions better than banks because of the fact that banks are for-profit institutions. With credit unions, there are fewer fees, and members get higher interest rates, and they are provided with better customer service. Here is a breakdown of the advantages and disadvantages of both credit unions and the banks:
When it comes to accessibility, big banks offer the accessibility factor because they are the ones with more branches open, even on the weekends. It is easier for customers to make a quick withdrawal or deposit. Banks also offer online mobile tools, which make banking a lot easier.On the other hand, credit unions are, most of the time, not available outside the area because they are really meant to serve communities. They really don’t have the so-called ATMs. What credit unions do in order to compensate is that they reimburse customers for ATM charges if they have to utilize other networks. Credit unions also have mobile banking options.
Checking account fees
When it comes to all major fees, big banks are popular for charging their customers for practically everything from overdraft fees to maintenance fees. Credit unions, on the other hand, are able to carry on their overhead savings to customers because they usually have just smaller operations. This means that they have fewer fees charged to their customers. Most of the largest credit unions offer free checking, in fact, 70 percent of them, whereas only 39 percent of banks practice this, according to Bankrate.com.
There is really no assurance these days when it comes to interest rates because they fluctuate all the time, even the savings accounts in banks do not generate as much interest for their customers and account holders. It is always advised to compare banks’ interest rate offers to make the right choice.When it comes to credit unions, they usually are known for having higher interest in terms of savings and checking accounts. However, a recent survey suggested that they do not do it anymore for checking. And if they do, the rates are so low.
While banks had a better year when it comes to customer service in 2012, credit unions still rated the highest overall for customer service compared to banking services.
In the end, it is clear to see that credit unions offer more advantages compared to banks. Big banks may be attractive; they may have so much to offer, showing off their wide array of credit products and services, flashy advertisements and logos. For the majority of the criteria, it’s easy to say that credit unions are hard to defeat. If there is only one thing that banks can offer and credit unions cannot, it is only the lack or the unavailability of branded ATMs everywhere. But if this is something you do not really look after, then credit unions are the best option by far. The fee structure alone is more than enough to open a checking or savings account. Aside from fewer fees, you also get to enjoy personalized services and excellent customer service from the organization.