What’s The Difference Between Credit Union and Bank Services

What Services Do Credit Unions Offer

If you are thinking about joining a credit union, you’re probably wondering what you can expect from deciding to do your banking with credit unions. While some people assume that credit unions are distinctly different from more traditional banks, though, these two types of financial organizations are almost identical—at least in terms of the services they offer. Virtually any service provided by a bank will also be available with your credit union, including both personal and business banking needs.

Banking with Credit Unions: Key Services to Expect

To start, let’s take a look at the specific services that will be available to you as a member of a credit union:

• Checking and savings accounts
• Certificates of Deposit (CDs), Individual Retirement Account (IRA) Certificates, and other low-risk investment savings tools
• Loans services, including personal loans, mortgage loans, mortgage refinances, home equity loans, auto loans, business loans, and more
• Credit cards and debit cards
• Merchant account services, credit card processing, and payroll processing for businesses
• Digital/online banking and bill payment services
• Physical bank branches and ATMs for in-person financial services

As you can see, the list of core essential services at credit unions is precisely the same as the list of key services you’d expect to find at any bank. Whether you are looking for simple checking and savings accounts to manage your money or seeking a mortgage to buy a house, you can expect a credit union to meet these needs, provided you are a full member.

Credit Unions vs. Banks

While credit unions intend to operate very similarly to banks, they are not the same. Banks are for-profit institutions, many of which are vast corporate enterprises with considerable stock values, big boards of directors, and nationwide or even global reach. The top priority of a for-profit bank is, simply put, to make a profit. These businesses are driven by a motivation to increase their stock prices and maximize dividends for shareholders, among other capitalistic aims. That’s not to say that banks do not serve the needs of their customers. Again, virtually any bank will offer the services listed above, along with one very substantial advantage: convenience. Banks, as a general rule, are much larger institutions than credit unions, which means they have a wider geographical reach. If you need to go into a physical branch location or find an ATM, you’ll have more options at your disposal if you do your banking with a traditional bank than if you do your banking with credit unions.

This convenience is a trade-off when you choose a credit union for your banking, simply because being a member of a credit union offers a range of perks and benefits that you won’t get with a traditional bank. Credit unions, unlike banks, are non-profit institutions. Rather than pursuing bigger dividends for stockholders or higher salaries for the board, credit unions are driven by another motivation: providing the best possible service for members. All members are technically part-owners of a credit union, which means they get to vote to elect the board of directors (an unpaid panel that sets policies for the credit union and makes key decisions) and even are eligible to sit on the board if elected.

The member-focused nature of credit unions also means that these institutions will often offer services, rates, and programming opportunities that would be nearly impossible to get at a for-profit bank. Banks, while they provide necessary services to their customers, make decisions to increase profit. As such, member benefits and other perks that are in the best interest of the customer (but not necessarily the profit of the organization as a whole) aren’t typically on a bank’s radar. Credit unions are different because they don’t draw a profit at all. Instead, their ability to provide loans and other financial services comes from the members who bring money to the bank by way of checking and savings accounts. As credit unions grow and get more members (and more assets to manage), their ability to offer loans, favorable fees and interest rates, member benefits, financial education opportunities for members, and other services or perks increases. Banks would use growth to foster higher profits and bigger checks for key stakeholders. Credit unions pass these benefits back to their members, which is why they are known for offering higher interest rates on savings accounts, lower banking fees, and better member benefits than banks.

Indeed, with a bank, you might have more branch locations that you can visit in more parts of the country—an advantage if you travel a lot, for instance. However, with online banking getting more sophisticated by the day, this convenience advantage isn’t worth as much as it used to be. Even if you are abroad, you will be able to use your credit union’s mobile and online banking tools to access your account, ask vital financial questions, and more.

Banking at Resource One Credit Union

If you think that banking with credit unions sounds like a favorable option, consider setting up a phone call or sit-down meeting with one of our associates at Resource One Credit Union to learn more. Whether you are mostly looking for personal checking and savings accounts or need the help of a financial institution to launch a new business, we can help. In addition to favorable interest rates and bargain fees, our members also love our innovative options for youth banking accounts, our R1 Cha-Ching program, and our considerable member benefits. With all the core services of a traditional bank, plus the kind of tight-knit member-focused community that credit unions are known and beloved for, we think we can help you live a more financially-sound lifestyle. A more rewarding banking experience is our foundation. Contact us today to get started.