Banks vs. Credit Unions

There is a difference between a bank and a credit union. Many people are not aware of the differences between banks and credit unions, and many are surprised to learn that banks and credit unions are completely different financial institutions. I have nothing in particular against banks, but I happen to do my banking at a credit union.

If there was a debate of banks vs. credit unions which would you choose? Read on to learn the facts about both banks and credit unions. Then you can make an informed decision, and choose the one that offers the best benefits for you and your particular financial situation. Both banks and credit unions offer similar financial services, but there are some differences in the financial services banks and credit unions offers.

	Credit Unions	Banks
Ownership	Member owned	Stockholder owned
Checking	Free and low-cost checking accounts	Free and low-cost checking accounts
Savings	Possibly higher interest rates (the more you save, more you earn through interest rates)	Usually have more ways of saving money: cds, retirement plans, stocks, bonds, etc.
Loans	Can have lower interest rates on loans (less you have to pay in loan payments)	Might have higher interest rates on loans
Other Services	Usually less ATMS, fewer branches to use credit union ATMs	More ATMs, more branches (but usually higher ATM fees)

Credit unions are non-profit organizations that are owned by members that bank at the credit union. Banks, on the other hand, are for-profit and are publicly traded companies. Banks are owned by stockholders who have voting rights. Also, banks do not have a membership, and anyone can utilize their financial services. In the past, a person could only join a credit union through their employer. But now, schools, churches or community associations have their own credit unions, or become members of existing credit unions.

Weigh these differences between banks and credit unions to see which would be better suited to your needs. Are low interest rates on loans important to you, or is the convenience of easily accessible ATMs more important?

Banks are usually much larger than credit unions. Therefore, most credit unions will not have as many branches or ATMs. Again, if you need to use ATMs every day and there are no credit union ATMs near your location, a bank may be better for you. Also, credit unions usually do not offer all the financial services that a bank is able to offer. However, many credit unions are now partnered with other credit unions, so members can use other credit union branches, and their ATMs, instead of their own.

I personally like credit unions because of their low-cost fees. Plus they just seem smaller and have more of a family feel. Since you now have the facts, you decide whether banks or credit unions are better. Banks vs. credit unions - you choose!

Sharman Lawson is a financial coach, speaker, and author of the book 12 Steps to Eliminate Debt Forever! Visit her website at www.sharmanlawson.com.