Credit Union or Bank?! and Y?I've had them both but that was wen i was young... now as a woman i'm looking more into it... | |
Credit Union or Bank?! and Y?I've had them both but that was wen i was young... now as a woman i'm looking more into it... | |
Well, if you are in Massachusetts, go with a bank. You get a $200 exemption from your state tax on any interest earned from a bank operating in the state.
Credit unions are financial institutions, like banks. They offer many of the same products and services -- savings accounts, checking accounts, ATM/debit cards, credit cards, auto loans, mortgages, home equity loans, etc. Both have deposit insurance so your money will be safe. Credit unions have insurance through the National Credit Union Administration, which is a government agency similar to the FDIC. Most of the time credit unions offer better rates and have fewer fees than other financial institutions. Banks have more branch offices than credit unions.
The main difference from your viewpoint as a consumer is that you can become a customer of any bank, while credit unions can only serve people who fit in their "Field of Membership." Some credit unions are sponsored by a company and only the employees can join. There are numerous credit unions that have "community charters" which allow them to serve people who live within a defined geographic region (i.e. city, county, zip codes, etc.).
At a credit union, the people who have accounts are the owners of the financial institution. There are no outside investors, like you find with banks. As financial cooperatives, credit unions offer people the opportunity to pool their resources (deposits) to provide products and services (loans, transactional accounts). Since credit unions are not-for-profit, all proceeds generated are put back into the institution in the form of better rates, fewer and lower fees, new products & services, and bonus dividends.
Hope this helps. Good luck.
Credit Unions can usually offer slightly better rates on loans and such. What you lose most of the time is the convenience of multiple locations of bigger banks. My favorite checking account is Schwab. It is an online checking account that offers very competitive interest rate, no fees whatsoever, and they reimburse you for all ATM transactions anywhere. Great customer service and great all around bank!
Banks charge lots and lots of fees even if you have a minimum balance. Some credit unions don't charge any fees if you have a minimum balance, like $2000.