What’s the difference between banking with a regular bank and credit union?
November 12, 2008
Have been suggested for savings and checking account at a credit cooperative el? ? one in my city? american called 'the cooperative credit s first, my question? what? the difference between the activity? bank to a normal bank and credit cooperatives?
lotuswarrior
Posted by admin under blog | Comments (5)
on the surface there is no difference — but since the credit union is a member ship normally they are easier to get a loan with better financial rates!!!
Comment by mister ed — November 12, 2008 @ 2:43 pm
This site explains it all in columns (easy to read and under stand)
Comment by Pepe LePue — November 14, 2008 @ 6:30 am
Credit unions are not for profit. That is, the people who have accounts there own the credit union, so they typically have lower fees, higher dividend (interest) rates on deposits, and they have very competitive loan rates. For those with a lot of money, they get some of these perks from banks, but for the rest of us it is nice to be treated fairly.
Comment by moonman — November 16, 2008 @ 8:36 am
The difference is mainly that a bank is much larger and has much more in the way of assets (and therefore, theoretically, less likely to be in danger of folding and taking your money with it).
Also, most if not all credit unions do not get rated by Standard and Poors or Moody’s or other grading facilities to show their strength. It costs a lot of money to do that and most Credit Unions don’t have the asset base to do it.
Also, credit unions, not having the rating, will pay more for the money they buy (yes, banks buy money to loan and invest with, etc… when you give them your money for, for instance, a time deposit/ certificate of deposit/ term deposit, whichever term it uses, they are in essence “buying” the money from you for a period of time, and they use it to loan out to earn interest) than rated banks, which is why they can offer you on the whole, higher interest rate returns on your deposits.
This all isn’t to say that the credit union isn’t safe. It is, however, owned by members, not shareholders, and is generally much smaller.
Hope this helps!
Comment by LJG — November 17, 2008 @ 11:54 am
From your standpoint as a consumer, there is very little difference between a credit union and a bank when it comes to basic financial services such as savings accounts, checking accounts, auto loans, mortgages, credit cards, debit cards, etc. To join a credit union, you must fit in the “field of membership” — for example only people who work at Motorola Employees Credit Union can join it. Check with the credit union in your area to see if you can become a member. Here is a resource that can help you find a credit union to join:
Credit unions are not-for-profit financial cooperatives. They are regulated by your state’s department of financial institutions or the National Credit Union Administration. Deposits are insured, just like at a bank. So you don’t have anything to worry about.
Hope this helps. Good luck.
Comment by Mel M — November 17, 2008 @ 1:20 pm