There’s a reason people say “Credit unions are better than banks.” Many people don’t understand the differences between a credit union and a bank. When it comes to credit unions vs. banks here are five key differences.
#1. Credit Unions are Not-For-Profit
One of the key differences between banks and credit unions is that credit unions are not-for-profit financial institutions. When you deposit your money at Alltru Credit Union, you’re actually buying shares of the cooperative. Rather than being a customer, you are a member owner of the credit union. Banks answer to a number of powerful investors which means they are more likely to take risks with your money and charge high fees and interest rates to ensure a profit. The interests of a credit union principally end with its members. When you succeed, so do we!
#2. Credit Unions are People Focused
Credit unions were founded upon the motto of ‘people helping people’, which we hold true to this very day. Unlike a customer at a bank, you are treated as a member and a shareholder of our cooperative. We often hear that we feel “friendlier” than the big banks, perhaps that’s because we’re not building a relationship between business and customer, but rather between partners with a shared stake. Credit unions require that you are a member of a particular group with shared interests, whether it is the industry you work in or simply the region where you live. At Alltru, we serve anyone who lives, works (regularly does business in), worships or attends school in the City of St. Louis, St. Louis County or St. Charles County. Learn more about Alltru membership.
#3. Credit Unions Provide Community Impact
A financial institution, when built on a foundation of integrity, can accomplish great things when it’s focused on the needs of the community and not excessive income like some of the big banks. At Alltru, our community efforts are strategically aligned with some of the greatest needs of our community —education, job training, and sustainable housing. It is the driving force of how we do what we do, but more importantly, it’s why we do what we do. Investing in in a credit union is about more than a checking account, it’s a way to leverage your investment into affecting real and lasting change in your community.
#4. Credit Unions Have Better Rates
You name it! Interest rates on auto loans, mortgages, personal loans, and credit cards tend to be lower at credit unions like Alltru. Many credit unions also have less strict loan eligibility requirements and are understanding of special circumstances, such as self-employment that may be unattractive to banks. Not only are fees and interest rates typically lower, but savings accounts, CDs, and bonds usually yield higher returns at credit unions. Check out Alltru’s High Yield Online Savings account.
#5. Your Money is Protected
Bank proponents sometimes point to the fact that deposits in credit unions aren’t covered by the FDIC. Instead, credit union savings are federally insured by the National Credit Union Administration (NCUA), a U.S. Government agency. For all intents and purposes, the types of coverage the two agencies provide are identical. Both offer insurance of up to $250,000 per depositor, per institution, per account category.
You can rest easy knowing that your deposits are safe and sound and protected by the NCUA, who administer the National Credit Unions Share Insurance Fund (NCUSIF), similar to the banks’ FDIC.
Ultimately, making the best financial choice depends on your needs and being informed about your options. Always keep in mind that at a profit-driven institution (like a bank), your questions will be answered by a sales representative. At Alltru, your questions are answered by our knowledgeable member experience specialists. Learn more about the distinct differences between banks and credit unions here.
Until the next time,