Banks vs. Credit Unions: What's the Difference?

There are many different options when it comes to getting a loan or opening a new bank account. Both banks and credit unions can probably help you, but one may be better based on your specific needs. Here’s what you can expect from banks vs. credit unions and why it matters.

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 big banks may get an advantage due to their larger scale. It depends on your credit union. At New Covenant Dominion 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 the U.S. government. To be safe, make sure your bank has FDIC insurance or your credit union has NCUSIF insurance. At New Covenant Dominion Credit Union, 100% of your money is NCUSIF insured. This means your money is safe with us.

Products – Pretty Comparable

The products available at banks and credit unions are very similar. For most of us, it’s a coin toss since either one has checking accounts, loans, savings, and CDs. Credit union rates are often a bit better, but there are plenty of exceptions. While banks pay you .3% on your CD’s and deposits, we pay up to 1.5% or more.

Customer Service – Varies

Both banks and credit unions can offer great customer service, but they can also make mistakes. In credit unions, service may be more personalized, and it’s easier to get to know people. However, they may also be less formal – especially in small credit unions. If you like your bankers in pinstripes, stick to a large bank or credit union. We take pride in knowing our members at New Covenant Dominion. We think of our customers as our friends and family.

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’re thinking of taking control of your money and making more of it, New Covenant Dominion Credit Union is the place for you. We are the ministry, church, families, and affiliate’s choice. Call us today to get started at (718) 328-3930!