What is is the difference between a credit union and a bank? And why should it matter to you?
In reality, both offer similar financial products and have similar operating guidelines, so your money is safe in either institution. Distinguishing between a credit union and a bank can be confusing, even for those who are financially savvy. However, there are two distinct ways that credit unions differ from banks: credit unions are not-for-profit and member-focused.
As a non-profit entity, credit unions can offer higher interest rates on savings accounts and CDs, and lower rates on loans and credit cards. Credit unions are owned by its members, versus stockholders at a bank, resulting in more member-focused policies.
Credit unions have a lot to offer over banks. Here are more advantages to joining a credit union:
Member-focused. Credit unions put member service at the forefront, making them more people-friendly and accessible than a bank. Since they are owned by members, the focus is on the member and providing the best experience possible versus generating a profit for its stockholders. Credit unions tend to be smaller and more localized than banks, allowing them to focus more on the member. Because they are owned by members, credit unions have a higher focus on their members and the surrounding community.
Better service. Credit unions can offer fast and personal service due to their smaller branches. If you’re a frequent member, you’ll likely receive personalized service and develop a working relationship with the same person.
Better interest rates. Because the focus of a credit union is covering operating costs and not making a profit, they are able to pass on lower rates and better interest rates to their members
As a result, credit unions pay higher interest rates on savings, CDs, and even checking accounts. If you’re searching for a loan or credit card, credit unions offer lower rates than a traditional bank.
Lower fees. Compared to banks, credit unions have lower and fewer fees. Additionally, many credit unions offer accounts with no minimum balance or monthly service fee, resulting in a potential savings of hundreds of dollars per year.
More flexibility. With their member-focused philosophy, credit unions are more likely to work with you even if you have poor credit or other financial issues. Additionally, credit unions also offer financial education to help get your budget on track.
TN Connect Credit Union offers a full range of financial products, from everyday savings, checking, and loans to retirement and pet savings accounts. It is our commitment to help you meet your financial needs today and reach your goals for tomorrow.
Connect with us today by stopping by one of our convenient branches, calling Member Services at 865-688-2424 or visiting our website!