|At other banks (for-profit organizations):||At NCDFCU (a nonprofit organization):|
|Operations are profit-driven, so interest rates and fees are higher than they need to be in order to yield profits for shareholders||Operations are member-driven, so we offer low-cost financial services based on our members’ needs|
|You’re just another customer||You’re a valued member and part owner with decision-making authority|
|Shareholders vote their shares; customers do not||All account-holding members are entitled to an equal vote|
|You pay excessive fees||You only pay minimal, affordable fees|
|Only larger loans are available at high interest rates||Small loans and large loans are available at reasonable interest rates|
|Customers are not privy to the inner workings of the financial institution where their money is held||Information is freely available to all members at the annual members meeting and upon request|
So you need a loan or a new account, and you’re not sure where to go. Both banks and credit unions can probably help you, but one may be better. What can you expect from banks vs. credit unions and why does it matter?
Ownership – the Main Difference
You may not care – or you may think it’s significant – but the main difference between banks and credit unions is ownership. Credit unions are nonprofit organizations owned by their customers, who are called ‘members’. Ideally this means you’d get a better deal at the credit union.
Without outside owners demanding increasing profits, the credit union should provide great services at a fraction of the cost. However, it’s not always the case. Some credit unions just act like banks with tax benefits, and large banks may get an advantage due to their larger scale. It depends on your credit union.
AT DOMINION FEDERAL CREDIT UNION, OUR MEMBERS PROFIT
Safety – Neck and Neck
Banks and credit unions both keep your money safe. If the institution goes under, some or all of your money may be guaranteed by theUSgovernment. To be safe, make sure your bank has FDIC insurance or your credit union has NCUSIF insurance.
AT DOMINION FEDERAL CREDIT UNION, 100% OF YOUR MONEY IS FDIC & NCUSIF INSURED.
Products – Pretty Comparable
The products available at banks and credit unions are very similar. For most of us, it’s a coin toss: either one has checking accounts, loans, savings, and CDs. Credit unions rates are often a bit better, but there are plenty of exceptions. On the other hand, banks often offer more products and services than a small credit union. WHILE BANKS PAYS YOU .3% ON YOUR CD’S AND DEPOSITS, WE PAY UP TO 1.5% OR EVEN MORE.
Customer Service – Varies
Both banks and credit unions can offer great customer service. They can also make mistakes.
In credit unions, service may be more personalized, and it’s easier to get to know people; there are fewer employees and fewer customers. However, they may also be less formal – especially small credit unions. If you like your bankers in pinstripes, stick to a large bank or credit union. AT DOMINION FEDERAL CREDIT UNION, OUR CUSTOMERS ARE OUR FRIENDS & FAMILY, WE KNOW THEM AND THEY KNOW US.
Banks are more likely to offer robust websites and 24-hour customer service lines. These may be valuable if you have a rigid schedule. However, some credit unions have excellent websites, and you may not even need more than a page to view your account balance and pay some bills.
Which Should You Choose?
There’s no clear answer to the bank vs. credit union question. You should consider both of them, and maybe even keep accounts open in multiple places. For loans, you should at least inquire at a credit union, and give them some of your other business (checking, savings, etc) if you get a good deal. However, you may enjoy the horsepower of a larger bank (not necessarily the largest ones) in some areas of your life.
WHEN YOU THINK OF CONTROL OF YOUR MONEY AND MAKING MORE OF IT, DOMINION FEDERAL CREDIT UNION IS THE PLACE FOR YOU. WE ARE THE MINISTRY, CHURCH, FAMILIES AND AFFILIATES CHOICE.