November 22, 2023 • 3 mins
When it comes to banking, Americans are exceptionally loyal. According to a 2021 Bankrate survey, consumers tend to keep their checking and savings accounts open for an average of 17 years.
If you happen to be looking for a new financial institution, however, you may be considering credit unions and banks. This article breaks down the key differences between the two to help you find out which one is right for you.
No matter which you choose, your money is protected at insured credit unions and banks. (Credit unions are insured by the NCUA; banks are insured by the FDIC.) Your money is safe up to $250,000 in the event of a bank collapse.
The key difference between a credit union and a bank is that a credit union is a nonprofit institution that is owned by its members, while a bank is a for-profit institution that is owned by shareholders. This difference affects the rates, fees, services, and products that each institution offers. Generally, credit unions offer higher interest rates on deposits, lower interest rates on loans, and lower fees than banks. However, banks may have more branches and more cutting-edge technology and products compared with credit unions.
Because a credit union is owned by its members, any profits are returned to members in the form of lower fees and higher interest rates. Here are just a few benefits of joining a credit union:
Credit unions don’t pay dividends to shareholders. Any profits are returned to members in the form of lower fees and higher interest rates on savings.”
While both credit unions and banks offer a range of financial products and services — including checking accounts, savings accounts, loans, credit cards, and online and mobile banking services — a bank may be a better option if:
When you join Patelco, you become a member and an owner. We offer benefits for our members, including:
The best type of financial institution for you depends on your individual preferences and needs. If you’re looking for lower fees and higher interest rates, a credit union may be the right choice for you. Explore the benefits for Patelco members and join today.
You can save more and save easily when you set up automatic savings using Patelco’s online banking. Learn more now.
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Source: Bankrate / YouGov PLC