Whether you look online or follow TV ads, you’ll find that banks usually have a lot more exposure and better marketing campaigns than most credit unions. Chances are that people you meet in your daily life will know a lot about certain banks that they’ve gotten their mortgages or deposit accounts from, rather than about the large credit unions that operate in their area.
There is a good reason for all of that: credit unions are nonprofit, smaller financial institutions run by their own customers. While banks seek to gain profit through various means and even try to impose aggressive promotional campaigns to attract more clients for that purpose, credit unions rely on a tightly knit community where members of that particular community will learn about the union through other members or their employers and community leaders, and join of their own accord.
Delving deeper into the differences between credit unions and banks, we will find that the following facts are all true:
- Firstly, banks aim to make profit, while credit unions do not. A credit union will just have to generate enough income to support its normal operations. Banks, on the other hand, will spend significant money on marketing and advertising, as well as investment methods that bring in profits which only partly ever reach their customers.
- Resulting from the previous point is the fact that a Parker credit union, and other credit unions as well, actually provide better rates on mortgages and other financial products. For instance, the average national rate for certificates of deposit in 2020 was 0.94% for credit unions and only 0.78% for banks.
- Technology is a strong point when it comes to banks, as even the best credit unions fall short sometimes when it comes to online security and providing clients with a more interactive experience. Credit unions are also much smaller, and they generally have less infrastructure than banks, which can provide their clients with several brick-and-mortar locations even in smaller cities.
- When you join a credit union, you actually have more access to ATMs than at a bank. Credit unions work with narrow margins and are able to charge lower fees on services such as ATM withdrawals or checking accounts.
- There are somewhat fewer options when it comes to getting financial products such as credit cards. Banks offer a greater diversity in almost all cases. However, as a member in a credit union, you actually have a say in how the union conducts its policies and creates its products.
Whether you choose to go to a bank or a credit union, you will definitely have a lot of options at your disposal. However, while banks aim to provide a diverse set of products for everyone who wants an account, credit unions focus more on creating a community of members who have more of a say in how the union works, as they are the ones who run it. As long as you don’t mind the less developed technology and you want better rates than what you’d enjoy at most banks, credit unions are definitely worth considering.