If you’ve been thinking about moving your money out of your bank, to a credit union, there are plenty of reasons to take this action. Although banks and credit unions look the same on the outside, they operate differently in many ways, and credit unions often have better perks than banks.
Still on the fence? While you’re contemplating your options, here are six good reasons to switch from a bank to a credit union.
1. There are online credit unions
Don’t have a local credit union? That’s okay because you can bank with a federal credit union that operates online. Getting an online account will give you access to all the usual perks of a credit union without the need to travel far to open or access your account.
This works great when you’re okay with using ATMs and depositing funds electronically. However, always check the terms of your agreement before you sign up for an account to make sure it meets your needs.
For instance, if you need to deposit cash, you’ll need an intermediary account to deposit your cash first and then transfer that money to your online credit union account.
2. Credit union checking accounts come with perks
When was the last time your checking account earned you any money? Sure, you might earn pennies here and there with your bank, but it’s probably nothing substantial. You might be able to earn pocket change by leaving a few thousand dollars in your savings account, but that’s usually all you can get.
Credit unions, on the other hand, generally offer great perks for their checking accounts. For example, many provide cash back just for spending your own money without keeping a minimum balance in your account. Without a minimum balance, the return is usually small, but if you earn $50 per month just by paying your bills, that adds up to $600 per year.
3. You can get a free checking account
You’ve probably noticed that free checking accounts are hard to come by these days. When you bank with a regular banking institution, you can expect to be charged at least ten dollars per month just to have an account.
Sometimes banks will waive this fee if you have direct deposit or keep a minimum balance. Although, if you don’t get direct deposit and you can’t afford to keep your cash tied up, you’re stuck paying the monthly account fee.
Many credit unions offer free checking accounts without requiring you to keep a minimum balance. It depends on the institution, but if you want to save money on unnecessary fees, a credit union will save you at least ten bucks per month.
4. You’ll get better customer service
Credit unions are non-profit cooperatives, which is why they pass on so many benefits to their members. Any profits from a credit union are given back to the members in the form of lower fees.
The non-profit dynamic creates a pleasant environment for both customers and employees, which naturally leads to better customer service.
5. You can get lower interest rates for loans
If you’re going to take out a loan through your financial institution, you’ll get lower rates with a credit union than with a traditional bank. It might not seem like big savings at first glance, but once you do the math, you’ll see that you can save thousands of dollars.
Saving money on interest is great when you’re looking to buy a car or a house. You’re in a good position anytime you can get a lower interest rate on long-term expenses connected to a loan.
Big banks don’t have a great reputation for loans and taking out a loan can be risky. Many banks are still involved in lawsuits from the housing market collapse in 2008 after banks intentionally gave out too many subprime mortgages.
6. There are credit unions just for veterans
One of the coolest things about credit unions is there are some that exist just to serve veterans, military personnel, and their families. These particular institutions offer greater flexibility for families who need to relocate frequently, along with better rates – sometimes better than standard credit unions.
Credit unions are better overall
If you’re tired of banking with an institution that treats you like a faceless number, doesn’t offer any benefits, and charges you high fees, switch to a credit union. The difference in how you’re treated will be a pleasant experience.