How is a Credit Union Different from a Commercial Bank?
Credit unions offer checking and savings accounts, loans, and other financial services. In other words, they provide the same services that commercial banks offer. Is it any wonder that people get confused about the differences? While you can get the same services at a credit union as you can get from a bank, there are a few key factors that set credit unions apart.
First, credit unions have a different ownership structure than commercial banks. Commercial banks are owned by just one or a few people. Leadership generally comes from the top down, and only a few people get to make important decisions.
Credit unions, on the other hand, are owned by their members. When a person puts money into a credit union, they purchase a portion of the organization. As a result, that person has the right to provide input on major decisions and vote on changes.
For-Profit vs. Nonprofit
Why do credit unions and banks have such a different ownership structure? Because banks are businesses. Their end goal is to make a profit. Credit unions are nonprofit organizations, so any money that they make must be invested back into the credit union itself.
Many people choose credit unions because they prefer this nonprofit structure. Because of the nonprofit nature of credit unions, these organizations can afford to offer better interest rates and simpler loan approval processes than commercial banks can offer.
In a commercial bank, clients may have virtually any job, background, and lifestyle. Credit unions have more specific membership communities. Some credit unions serve people from a specific region. Some serve people within a specific industry.
These specific membership requirements sometimes intimidate people, but finding the right credit union for you may be easier than you think.
Plus, credit unions provide community-specific benefits. A teachers’ credit union, for example, may offer investment opportunities that work within a teacher’s salary. A credit union for veterans may offer classes on military benefits.
Considering a Credit Union?
Once you decide to join a credit union, you’ll need to find the one that works best for you and your financial needs. You’ll find a lot of options, but Bundlefi can help you narrow down your choices based on what you need most.
Take a look at Bundlefi today to start comparing credit unions. We match people and businesses with the financial institutions that accommodate them best. You have options, so let us help you make the most of them.