Why Should You Think About Switching to a Credit Union?
Not all financial institutions are the same. Where you do your banking can make a major difference in how much you pay for loans, checking accounts, and much more. Maybe you’re looking for a new way to make your money work harder for you while still giving you easy access to your funds.
Credit unions, like Robins Financial Credit Union, offer numerous advantages to their banking institution counterparts and can help you achieve financial freedom. The benefits credit unions offer – such as competitive rates on loans, solid returns on investments, free or low-cost checking and savings accounts, financial education services, and free or low-cost ATM access – might help you understand why there are more than 5,500 federally insured credit unions operating in the United States.
What is a Credit Union?
Credit unions and banks are similar in one important way: both offer their members or customers valuable financial products. These products span a wide range and may include checking and savings accounts, certificates of deposit, loan products, credit cards, and access to funds via ATMs or electronically.
One key difference is who owns the institution and benefits from your banking there. Credit unions are member-owned and exist to serve members, not drive profits for a bank owner or stockholders. Like banks, credit unions do take precautions to make sure your money is safe. Federally insured credit unions offer you a safe place to deposit funds, just like a bank does. The National Credit Union Administration Insurance Fund insures credit unions and provides the same protections that the FDIC provides banks.
Structure of Banks vs. Credit Unions
When you look at the structure of a bank, you’ll see that they are for-profit businesses that are held by either private owners or stockholders. Therefore, banks concentrate on earning profits, which are distributed back only to their owners, not their customers. Since owners and stockholders generally want to make the largest profit possible, that profit often may come by offering lower-quality customer service, higher interest rates on loans, and fee-based checking accounts.
In comparison, credit unions are not-for-profit and member-owned. Each member, or account holder, has an ownership stake in the entity: every member gets a vote. Credit unions generally have two overarching goals:
- Provide members affordable, easy-to-obtain services
- Redistribute profits back to members
Credit unions are represented by a volunteer board of directors, which any member is allowed to run for and become elected to. You become a member of a credit union through your initial deposit. This deposit establishes your ownership stake, makes you a part owner and gives you an equal voice in the credit union’s decisions, directions, and future. Credit unions work diligently to serve their members, not themselves. A credit union’s surplus earnings are returned back to members, sometimes in the form of higher interest rates on savings accounts, discounted rates on loans or additional banking services. Some credit unions also provide benefits such as financial education, retirement planning classes or college scholarships. Robins Financial Credit Union is committed to our members. From our Financial Calculators to help you set goals and plan for expenses, to our digital services, we’re here to help you achieve financial success.