Take a drive around any East Texas town and you may find an abundance of churches, fast food restaurants, and financial institutions. With so many options for handling your money out there, it can be overwhelming to decide who should be trusted with your hard-earned dollars. We will outline some general differences between banks and credit unions to help you determine the best choice based on your specific needs.
Banks
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- For-Profit – Banks by nature are for profit, which means they are a business entity first that profits from the services they offer.
- Services – Most banks regardless of size will offer savings and checking accounts, credit cards, personal and business loans, ATMs, and other programs.
- Fees and Regulations – One disadvantage of banks is because they are a business they tend to charge higher fees for their services. Credit card programs that seem initially appealing may have hidden fees woven into the final bill. But they are regulated by various safety requirements from the Federal Deposit Insurance Corporation (FDIC) so you can rest assured your money is safe.
- Convenience – Most banks tend to have more branches, many ATM locations, and technology like apps and online banking.
- Customer Service – Banks can be all across the board with customer service, but in general, bigger corporate banks that are in a hurry may provide impersonal service. With so many customers to assist in a day, you may feel your financial needs are not given the full attention you’d like.
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- Non-profit: By this definition, non-profit means credit unions are customer owned. However, to be a customer at a credit union, one must first qualify for membership. Membership requirements can be as simple as living or working in the same area that the credit union is in, though requirements can vary.
- Services – You will often find similar bank services offered at credit unions. This includes checking and savings accounts, personal and business loans, ATM access, and more. Because credit unions are more customer-focused, they are able to offer better deals for loans and higher paid interest back on savings accounts or CDs.
- Fees and regulations – Because credit unions do not have the pressure of generating profits for investors and don’t have as many locations to pay for, they can typically charge lower fees for CDs (certificate of deposit), loans, and mortgages. Credit unions, if federally insured, are backed by the National Credit Union Association (NCUA), which is credited by the U.S. government, so safety should not be a concern.
- Convenience – Since Credit Unions only allow membership in certain regions, location is usually not an issue for those who become members.
- Customer Service – Overall, a major advantage of credit unions is their customer service. Since they are membership-based and owned by the customers, quality personalized service is essential.
- Online technology such as:
- Mobile banking + app
- Mobile payments
- Online banking
- E-statements, receipts, and notices
- Bill pay
- Fee schedule
- Free tools such as our savings, auto loan, and mortgage calculators
- Savings, Checking, IRA accounts
- Term share certificates
- Certificate of Deposit rates
- Visa Debit cards
- …and much more!
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