Bank or Credit Union?

Have you ever wondered what the difference between a bank and a credit union was? If you are looking for the best place to secure your money, and are not sure whether to choose a bank or credit union, here are a few of the main differences to help you understand which would be better for you.

A credit union has members, not customers like banks do, when you deposit your money into a credit union you become a member, and part owner of the credit union. A credit union will have a small group of volunteer directors that make decisions, these directors are all voted in by members of the union, and a bank is different in that the customers have no say in how business is handled, investors are the only ones that are able to vote.

Credit unions are not for profit and that means that they do not pay income tax like banks and they will never have to use tax payers money in the event of insurance emergencies and annual losses. At a credit union you have the same options as a bank; you can deposit and withdraw, take out loans and even invest. Credit unions seem to have the best rates, and are more members oriented.

Your funds are not insured by the Federal Deposit Insurance Corporation, but instead by the National Credit Union Administration. This seems to be a great option; however the one thing that a bank will offer you is more locations and more access to ATM machines. If this is problem, and need the convenience of many locations you should probably opt for a bank. In recent surveys credit unions have come out on top offering better rates however you should decide what the best option for you is, ask around and see if your employer has a credit union, it could be a nice change if you've never tried one out.

Contributing National Payday Staff Writer

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