Banks and credit unions are both institutions where you can save money and borrow loans among other services. There are people who are more comfortable dealing with credit unions while others prefer banks. Although these institutions operate and provide almost the same services and products, both have other features that attracted their customers in the first place.
With a credit union, you actually join as a member and this means you get all benefits entitled to a member. With more affordable interest rates, credit unions such as the navy federal credit union provide personalized services to its members who are mostly navy employees.
The purpose of credit unions is to help its members and whenever there is a profit, all members gain. A credit union with many members such as the nfcu makes a lot of profits and offers good services to its members. With a credit union, you have the chance to choose the management and just the fact that you are a member makes you eligible to be part of the management too.
Credit unions are subject to the federal credit union Act which makes them non profit organizations that serve to provide credit services to people. Since they satisfy the financial needs of its members such as providing savings accounts, share certificates and credit cards just like banks, they have posed real competition to the banks.
Banks are not member owned and the fact that you have an account does not mean you have a say in the management of the institution. The investors who own the bank have all the power and when profit is realized, it is usually shared among them.
The main aim of a bank is to make profit and as such, the cost of their services tends to be a bit high. This is what makes credit unions affordable since they are not concerned with profits. With banks, getting a loan can be a bit tricky compared to a credit union. Apart from the fact that bank interest rates are higher, there are more requirements to be fulfilled before you can get a loan. If you are a member and maintain an active account, it is very easy to get a loan from your credit union.
As long as you are eligible to join a certain credit union, there are many benefits you get compared to a bank. But apart from this, your choice should always depend on such other factors as safe money keeping and customer friendliness.
