One of the most important decisions a person makes is which financial institution they want to utilize. Many individuals choose large banks because they are well known and it’s “just easier”, but is this the right decision? A recent Gallup poll found that as many as 74% of Americans had “some or very little confidence” in banks, while only 10% said they had a “great deal” of confidence.
As a credit union member, you can expect to have a much more rewarding and meaningful experience. Because credit unions are member-owned and not-for-profit, they are more attuned to the needs of their members and communities, and are not driven by investors or their bottom line.
And, while banks and credit unions offer nearly identical services and account choices, there are some subtle differences.
Let’s take a look at how having your checking account at a credit union differs from using a bank for the same purpose.
Profit vs Not-For-Profit
Many Banks are accountable to shareholders. The overall goal is to make money for those shareholders and take care of the bottom line. Banks may have larger advertising budgets and catchy jingles, but what really matters is how the institution will meet your financial needs, and what type of service you can expect from them.
When you open an account at a credit union, you are not just another customer, but a member. Since credit unions are member-owned and not-for-profit, they are more aware of the needs of their members and are not driven by investors or their bottom line. Credit union members own a piece of the institution, and the revenue created through operations gets returned to members in the form of better rates, fewer and lower fees, etc.
In general, banks tend to charge more and higher fees. According to Smart Asset, the average checking account fee for larger banks is $9.60/month. That is $115.20/year just to have an account! That is money that you should instead put towards your financial goals.
Credit unions see things differently. Many credit unions, including Belco, offer FREE checking account options to their members. This gives you the ability to set up your account and keep it running without it costing you a dime.
Credit unions tend to have less overhead than banks, so there is less reason for them to try squeezing more money out of each consumer. Why, then, would you fork over your hard-earned money to help keep a bank profitable, when you can use it to help grow your own net worth?
Fewer Strings Attached
Most big banks won’t allow you to open a checking account unless you have a minimum balance of several hundred dollars. In contrast, an incredible 76% of credit unions surveyed by a Bankrate Credit Union Checking Survey reported that they have no minimum balance requirements at all.
If you’re looking for a place to park your money without having to jump through an endless series of hoops, there’s no question here!
On average, credit unions offer lower rates on loans and higher rates on savings accounts – just what consumers want. The National Credit Union Administration reports that as of June 2021, the national average for a five-year new auto loan at a bank had an average interest rate of 4.78%, compared with 2.57% at a credit union.
Personalized Banking Experience
Banks serve customers. The focus is generally on accounts that can make the most money, like corporate/business accounts and individuals with higher income. With their attention focused on profit, what happens to the average person? Many times, banks do not offer that personal experience. People want to be more than an account number; they want to belong!
Credit unions do not serve customers; instead, each individual is a member. We want you to feel like you belong to a financial institution that has your best interest in mind, while helping you reach your personal goals. In addition, Belco, like many credit unions, hosts financial education seminars for members and the community throughout the year, enabling you to gain valuable knowledge and make smarter financial choices.
In addition, as a member, you are also a part owner of the credit union. Members have the right to vote on important decisions, including who represents the credit union on the board of directors.
When you stop by your credit union, you’ll be greeted with friendly, familiar faces and representatives who care. They’re always ready and willing to help you with whatever you need – whether it’s a question about your checking account, some personal financial advice or assistance with a possible fraud situation.
Like banks, credit unions are regulated by a governing authority. The National Credit Union Administration (NCUA) insures your account up to $250,000. This is the same amount insured by Federal Deposit Insured Corporation (FDIC) for banks. This means your money is protected no matter which kind of institution you choose for your checking account.
For credit union members, though, it gets even better. Credit unions face more restrictions on their investments and loans than banks do. This means your credit union must be super-careful with your money. They can’t make any rash decisions or investments that might hurt you as a member.
Giving Back to the Community
Credit unions are active partners in their communities. From sponsoring events, to volunteering time at local food banks and animal shelters, credit unions get involved and get to know their neighbors. Belco supports many community initiatives and organizations, including Big Brothers Big Sisters of the Capital Region, Children’s Miracle Network, and many other organizations across south central PA.
Credit unions are designed with the member in mind. Members benefit from better rates, personalized service, and peace of mind knowing that their financial institution has their back in their financial journey. If you live or work in the counties we serve and want to become a member of Belco Community Credit Union, we invite you to apply online today. Join a financial institution that works for you and your financial goals, not for the bottom line.