Banks vs. Credit Unions

More financial experts are urging consumers to drop their banks and join credit unions. While most people are familiar with banks, many aren’t as familiar with what is involved with joining a credit union. Here are some of the differences between the two types of institutions.

• Credit unions are owned and controlled by members. Those members may belong to the same church, neighborhood, or community group, or work at the same company. Banks are run by investors  and decisions are made by a board of directors.
• Any profits made at a credit union are distributed to members.
• Savings and checking accounts, and other investments made through banks are usually insured by the Federal Deposit Insurance Corp. (FDIC). Credit unions are insured by the National Credit Union Administration.
• Credit unions usually don’t have as many ATM machines in their network. However, if you have account at a credit union, the fees may be reimbursed for out-of-network ATM use.
• You may have an easier time getting a loan from a credit union. In some cases if you are turned down you may be able to appeal the decision and be reconsidered for a loan.

Just as there are good and bad banks, not all credit unions are created equal. If you are eligible for membership in more than one credit union, take the time to carefully compare their products and policies.

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