When selecting a financial institution, there are several factors you’ll want to take into account. One of them being do you want to join a bank or a credit union. On the surface, they appear very similar but when you take a closer look, there are a number of differences.
Credit Unions are a not-for-profit organization that is owned by the members and usually features a board of directors that are both volunteers and members. This board reflects the diversity of the membership and speaks on their behalf. Banks are for-profit financial companies that are run by paid board members that report and declare their earnings to the bank’s shareholders. These board members don’t necessarily reflect the customer base and don’t need to be a part of the financial institution they represent.
As a member of a credit union, you have a voice in how the company is run and who is on the board. Members can also run for election to the board. Banks are controlled by the stockholders whose vote is based on how many shares they own.
In order to become a member of a credit union, you need to fulfill a certain requirement, such as, living in a specific county or being employed by a specific company. Banks are open to the general public.
Members of credit unions can enjoy the CO-OP ATM network and a shared branch alliance. This means you can withdraw or deposit money into your account from any credit union or ATM that is a part of the CO-OP system. The network currently includes almost 300,000 surcharge-free cash machines around the country as well as over 5,000 branch locations. Banks do not offer this service and any transactions need to be made at a location that is owned by the bank.
Credit unions are insured by the National Credit Union Administration (NCUA) while banks are insured by the Federal Deposit Insurance Corporation (FDIC). Both protect their institution’s accounts up to $250,000 and are backed by the “full faith and credit” of the U.S. government.
Because credit unions are not-for-profit, they are able to offer higher saving rates and lower rate loans as compared to banks. The credit union’s focus is on the member and the services that they need, creating a more member friendly environment.
If you are thinking about joining a credit union, consider Cyprus. As Utah’s oldest credit union, we have a long history of stability, affordability and credibility. As we look to the future, we remain committed to providing the best financial solutions to our members.
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