Managing your finances involves a lot of big decisions: How should you invest your funds?
How should you structure your budget?
Where the heck should you evenstore your money?
Small and community banks, like Mount McKinley Bank in Fairbanks, Alaska, tend to rank higher with customers than big banks because of the personalized attention. Tina Russell/The Penny Hoarder
Credit Union vs. Bank: Whats the Difference?
They use that money to grow the company and pass along dividends to the owners.
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Each pop in of financial institution has its benefits and drawbacks.
Heres how credit unions and banks stack up across eight essential categories.
Summary: Credit Union vs. Bank
1.
Interest Rates
The biggest draw of credit unions as a financial institution is the higher interest rates they pay.
Winner: Credit unions
Did you know?
Even better for those with low credit scores?
However, banks are more likely to offer credit cards, though these typically come with higher interest rates.
Rewards
So far, it may sound like credit unions are a no-brainer.
But they do have their shortcomings, a major one of which is rewards.
In general, credit unions lack such options.
Winner: Banks
5.
Physical Locations
Large banks have brick-and-mortar locations all across the U.S., while credit unions tend to be regional.
But that was then and this is now.
TheAmerican Customer Satisfaction Indexfound that credit unions slightly lagged behind banks for 2019 and 2020.
Draw, for now
7.
Winner: Draw, for now
8.
Credit Union or Bank: How to Choose?
If youre keeping score, credit unions and banks are tied 4-4 across the eight factors we considered above.
So how do you know if you should go with a bank or a credit union?
You are not alone.
As weve seen in our comparison, both banks and credit unions have their pros and cons.
IIt really comes down to whats more important to you.
Note: Both are backed by some form of federal deposit insurance.
What are the Major Advantages of Credit Unions?
What are the Disadvantages of a Credit Union?
But not everything is perfect at credit unions.
It sounds appealing right?
Check it out here!
