Show Notes:
Are you looking for a quick overview of the differences and similarities between banks and credit unions? In today’s Finance Moment Podcast, Financial Planner Mike Murkins discusses these two types of financial institutions and how you might select the best one for your needs.
Banks
- Banks are for-profit institutions. Their goal is to generate profits for their shareholders.
- Banks have a wide network of convenient branches and ATMs making them accessible to customers.
- Banks offer a variety of products and services, such as checking and savings accounts to consumer and commercial loans.
- Banks are usually open to anyone who meets their eligibility criteria.
- Banks are regulated by federal and state agencies like the Federal Reserve and the FDIC (Federal Deposit Insurance Corporation), which insure deposits up to a certain amount, providing a level of security for customers.
Credit Unions
- Credit unions operate as nonprofit organizations and are owned and operated by their members.
- Because their main focus is not making profits for shareholders, credit unions often offer lower fees, better interest rates and more personalized customer service.
- To become a credit union member, you often must live in a certain location, work at a specific workplace, or belong to a particular organization.
- Credit unions are regulated by the National Credit Union Administration (NCUA), which also provides deposit insurance through the National Credit Union Share Insurance Fund (NCUSIF).
- Credit unions often shine when it comes to customer service because they are member-owned. Many also prioritize financial education programs, customer satisfaction and community involvement.
Which is right for you?
It depends on your individual needs and preferences. A credit union might be worth considering if you value personalized service, community involvement, and potentially better rates and fees. If you prioritize convenience, a wide range of products, and the stability of a large institution, a bank could be a better fit.
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