How are credit unions better than ordinary banks?

How are credit unions better than ordinary banks?

I have seen posts that claim this. I have Bank of America and I'-m thinking about switching banks because of their unethical conduct.

s

Credit Unions generally offer better interest rates. i have an account at a local credit union and one at a local bank. I like both--but the account at the credit union draws a higher interest rate. i'm not sure why it works that way, but as a member of the credit union-i am an owner, my deposits count as shares. also, i find that the folks that work at the credit union are more willing to work with you if you have a problem (i think they prob have more "control" over how things get handled) and seem to offer more "face to face" time.

matthewspeed

It depends on the context.Credit Unions are member owned as opposed to shareholder owned like a bank. This means that no pressure exists on management to produce returns beyond not losing money. In theory this should mean that the credit unions can offer lower lending rates, higher deposit rates or higher levels of customer service than banks as these items all take away from the bottom line. The credit union must still make a profit, obviously, because salaries, utilities and the like must be paid for but the shareholders are not about to throw management out because it didn't beat the S&P 500's return last year.Credit unions, however, are not well set up to serve large commercial interests well. The processes and software required to handle a high transaction customer like a Wal-Mart, Target or Barnes & Noble are simply beyond what even Navy Federal, the biggest credit union, would want to take on. Credit unions are also not well equipped to handle overseas transactions. While a BoA or Wells may have a physical presence in other countries, most credit unions don't even have multiple cities, much less states or nations.In both cases, management exists to serve the owners of the financial institution. A bank is owned by its shareholders, a credit union is owned by its members.Source(s):Commercial loan officer for Mel

Credit unions are financial institutions, like banks. They offer many of the same products and services -- savings accounts, checking accounts, ATM/debit cards, credit cards, auto loans, mortgages, home equity loans, etc. Both have deposit insurance so your money will be safe. Credit unions have insurance through the National Credit Union Administration, which is a government agency similar to the FDIC. Most of the time credit unions offer better rates and have fewer fees than other financial institutions. Banks have more branch offices than credit unions.The main difference from your viewpoint as a consumer is that you can become a customer of any bank, while credit unions can only serve people who fit in their "Field of Membership." Some credit unions are sponsored by a company and only the employees can join. There are numerous credit unions that have "community charters" which allow them to serve people who live within a defined geographic region (i.e. city, county, zip codes, etc.).At a credit union, the people who have accounts are the owners of the financial institution. There are no outside investors, like you find with banks. As financial cooperatives, credit unions offer people the opportunity to pool their resources (deposits) to provide products and services (loans, transactional accounts). Since credit unions are not-for-profit, all proceeds generated are put back into the institution in the form of better rates, fewer and lower fees, new products & services, and bonus dividends.You can go to FindACreditUnion.com to search for credit unions located near your home.Hope this helps. Good luck.

.7B credit union.

Mel

Credit unions are financial institutions, like banks. They offer many of the same products and services -- savings accounts, checking accounts, ATM/debit cards, credit cards, auto loans, mortgages, home equity loans, etc. Both have deposit insurance so your money will be safe. Credit unions have insurance through the National Credit Union Administration, which is a government agency similar to the FDIC. Most of the time credit unions offer better rates and have fewer fees than other financial institutions. Banks have more branch offices than credit unions.The main difference from your viewpoint as a consumer is that you can become a customer of any bank, while credit unions can only serve people who fit in their "Field of Membership." Some credit unions are sponsored by a company and only the employees can join. There are numerous credit unions that have "community charters" which allow them to serve people who live within a defined geographic region (i.e. city, county, zip codes, etc.).At a credit union, the people who have accounts are the owners of the financial institution. There are no outside investors, like you find with banks. As financial cooperatives, credit unions offer people the opportunity to pool their resources (deposits) to provide products and services (loans, transactional accounts). Since credit unions are not-for-profit, all proceeds generated are put back into the institution in the form of better rates, fewer and lower fees, new products & services, and bonus dividends.You can go to FindACreditUnion.com to search for credit unions located near your home.Hope this helps. Good luck.

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