Credit Unions vs. Banks: What’s the Difference?
Credit unions and banks resemble one another; they both offer checking and savings accounts, loans, credit cards, and online banking services. However, there are plenty of distinctions among the two that people should understand. Continue reading to learn the differences between credit unions and banks to find out which service offers the most benefits for your finances.
Credit Unions Come With Fewer Fees
Banks regularly issue monthly maintenance fees, high interest rates on loans, and overdraft fees. The costs add up quickly, but they help banks make a profit. However, saving money here and there is possible when you seek service from a credit union. Once you become a member, you’ll reap the benefits of low fees. Most accounts don’t require a minimum balance or monthly maintenance fees. These simple features make a big difference for your finances—and who doesn’t love saving money?
Banks Make a Profit From Their Customers
Revenue is a priority for banks. Each issued fee is a plus for commercial or private banks. The costs add up quickly for customers, but they promote the banks’ success.
Conversely, credit unions are nonprofit organizations. Their goal is to prioritize the financial success of each of their members. Any profits return to the members of the credit union through minimal fees, low interest rates, and amazing return rates on checking and savings accounts.
Credit Unions Have Different Qualifications
Banks allow people of all ages and credit histories to join. Although the fees and fine print aren’t favorable from time to time, the companies are easy to join.
Credit unions have several qualifications you must meet to become a member. The criteria differ from company to company, but common qualifications include the following:
- Living in a particular geographic region
- Being employed at a certain company
- Possessing family connections to the credit union
- Belonging to a specific group
Now you know the key differences between banks and credit unions. If you want to move forward in your financial goals, making the switch from a bank to a federal credit union in Massachusetts might be the right choice. GFA Federal Credit Union has plenty of tools to support your financial goals, from savings accounts to low-interest loans. Browse our website to see if our credit union is the right fit for you!