Money doesn’t grow on trees. That’s why we always strive to keep our extra money safe. Your knowledge of financial management started as early as when you had an awareness of using a coin bank to store your money. Now that you’ve grown wiser, you’ve familiarized yourself with financial institutions such as banks and credit unions that you can use to keep your hard-earned money.
Depending on your financial goals, you can either go for a credit union or a bank to have your money for safekeeping. Here are some things to consider when choosing between the two:
Interest rates
When you put your money either in the bank or in a credit union, your money can grow even you’re not doing anything with it through interest rates. If you still don’t have a decision regarding where to allocate your money, it’s best to put your money in credit unions because they usually offer higher interest rates on deposit accounts than banks. This is because the former has the objective of proactively helping the members of its union, whereas the latter works with a business model of maximizing profits.
If you’re planning to borrow money for a startup business or unexpected expenses, it’s also better to seek loan service from a credit union than from a bank. Because credit unions have a humanitarian mission, not just being business minded, they offer lower interests on loans.
So, whether you’re into getting more value of your money through savings or loans, it’s best to avail these services from credit unions such as https://www.empowerfcu.com/.
Quality of service
Both credit union and banks offer exemplary customer service. But if you’re looking for more personal and sincere interactions, the credit union can provide them better. Because credit unions are small-scale institutions and they are community oriented, they devote time attending to your needs personally.
Moreover, the heart of credit union is all about all its members, so it’s an essential factor for them to prioritize the satisfaction of their members. They are not driven by profit, but instead they are compassionate on how they can produce more financial gain to all the members of the union. That’s why they gear towards serving and not steering for better profits.
Investment options
Generally, credit unions have fewer options than banks. However, investment is still possible if you join a credit union. You can do it by applying to be a shareholder, wherein you put a certain amount of money and buy some shares in the union. It’s a bit expensive, though, compared with banks.
In banks, you can put even a small amount of money for investment as the bank will be the one pooling the clients’ money and putting it in various investment options, which can be in the form of mutual funds or unit investment funds.
Accessibility
Due to technology, banking transactions and services become more accessible and more efficient. To improve customer satisfaction, banks provide system upgrades and adapt technological improvements to make banking faster and secure. Moreover, they do have the capability in terms of capital. As a result, most banks offer extra services and tools such as cashless transactions and mobile banking and a broader range of accessibility in terms of ATMs and branches.
On the other hand, because credit unions are locally based and have limited funding in terms of improving their system, they may not be able to keep up with the advancements initiated by banks. Therefore, you can experience some limitations in their services. Also, you still have to observe the standard procedure of going to their office if you have financial transactions to perform.
Affiliation
Services offered by credit unions are exclusive for its members only. So, if you wish to use their services, you have to be affiliated with the union first. The good thing about credit union membership is that you’re considered to be a part owner of the whole institution and you have the power to elect members that will be managing all the activities of the union. Here are some ways on how you can be affiliated with credit unions:
- Your employer may sponsor you to join a credit union.
- Your family member who’s already an existing member of a credit union can endorse you for membership.
- Your social groups, work affiliations, and labor unions can make you a qualified member of a credit union.
- The community where you belong makes you an eligible member of a local credit union.
On the other hand, bank services are open to everyone. It’s as simple as opening an account with them and putting some money and you can avail all of their services for free.
Final thoughts
Your decision on choosing between a credit union and bank depends on your priorities and financial goals. If you’re keen on maximizing your savings account, spending less on loan interest rates, and getting devoted quality service in every transaction, then it’s best to get affiliated with a credit union. However, if you want more financial flexibility in terms of investments, extensive options, and accessibility, banks are a better choice.
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