In my over 30 years in the financial field, there’s one question that I’m continuously asked whenever I note my place of employment. That question isn't what’s your department like, how many work people in the marketing department or how long have you worked there. A large percentage of people I meet all want to know one thing: how is a credit union different than a bank?
Most people understand that credit unions are different, but don’t know how or why. And, while I do get this question quite often, I’m always eager to explain the differences and help credit union novices discover whether a credit union is a better alternative for their needs. So in the spirit of sharing, and for those of you wondering, here are some of the main differences between a credit union and a bank:
- Working for you, not investors – Credit unions are unique in their structure and mission. We exist to help members be more successful financially. Unlike banks, we do not issue stock or pay dividends to outside stockholders. As a not-for-profit cooperative, our primary focus is to serve members rather than generate a profit. Whatever earnings we generate are returned to members – rather than stockholders – in the form of lower rates, higher interest on deposits and lower fees.
- You’re part owner – As a credit union, we’re member-owned and operated, which means each member has an equal voice and vote within the cooperative – regardless of their status or how much money they have on deposit. We’re governed by a Board of Directors who is elected by our members and who serves on a voluntary basis.
- Lower rates, higher returns – Many credit union members choose to go this route vs. banks because credit unions generally offer lower interest rates. Our members also like the fact that they are treated as a benefit to Delta Community rather than “just another account number.” The more members who deposit money into a credit union, the higher the returns to the existing members. Also, credit unions are tax-exempt, which also translates to higher returns for our members.
- Low-cost services – Rising and hidden monthly fees has become a notable trend with most banks. With credit unions, this isn’t an issue. Since credit unions aren’t in the business of making money, we don’t charge the high fees and finance charges of traditional banks, while offering the same great services.
- Empowerment through education – Remember the old saying “give a man a fish, feed him for a day; teach him to fish, feed him for a lifetime"? A credit union’s commitment to meeting its members’ needs is also exemplified in on-going efforts to empower them with helpful financial information. Take for example the many no cost financial education seminars and workshops we provide. Our hope for these events is that our members walk away with the tools to impact their and their family’s financial outlook in a very positive way.
So which ever you choose - a bank or a credit union - be sure you're getting the most out of your banking institution. Your financial partner should be just that, a financial partner and not just a place where your money rests and earns interest.
Article submitted by Mary 
