A Comarsion Between Credit Union vs Banks

Clarence Schreiber By Clarence Schreiber, 4th Jan 2012 | Follow this author | RSS Feed | Short URL http://nut.bz/mfdkoo9n/
Posted in Wikinut>Money>Current Accounts

So what is the difference between Credit Unions and Banks? This article will show the difference between the two.

About Credit Unions

Credit Unions is a not for profit business. Any profits that they receive gets returned to their members by in a form of lower interest rates on loans, higher interest rates in their savings and free or lower cost services. Credit Unions always invests directly back to their members. They usually serve to those individuals that are usually members of the Credit Unions. The Credit Unions has members who acts like as co- owners and own a stake in the institution. Credit Unions are a member service driven organization. They are also federally insured by the National Credit Union Administration (NCUA). All deposits are insured by the NCUA for up to $250,000.00. NCUA also regulates all federal credit unions. Most of the Credit Unions are very friendly to their members and treats them as family. Credit Unions are also stricter rules on granting loans.

About Banks

Banks is a profit oriented business. The Banks return profits to a small group of investors (stockholders). They invest in corporate bonds or in the stock market. The banks are usually controlled by stockholders and paid officials. They usually serve to anyone in the general public. The banks are very much a profit driven corporation. All banks must be federally insured by the Federal Deposit Insurance Corporation (FDIC). All deposits that are in banks are federally insured up to $250,000.00. The banks have a paid Board of Directors who represent the banks and customer does not have voting privileges.

Similarities Between Banks And Credit Unions

Both, banks and credit unions offer the following services to all their customers (or members): savings, checking, Automated Teller Machines (ATM), Certificate of Deposits (CD), Money Markets accounts and Individual Retirement Account (IRA). They both also offer loans, debit and credit cards, money orders and certified checks.

Both also offer some kind of fees if their accounts like checking accounts if they get over drawn or left idle for a long period of time.

Some Downsides To Credit Unions

Some of the downsides to the credit unions are that are related to some of the institutions of being a smaller in size (meaning fewer branches) and Automated Teller Machines (ATM) and possible lack of or lower quality of online banking options as the big banks offer.

Some Downsides To Banks

When some banks grow bigger in size, they tend to lose some of the customer friendliness that got them to be bigger.Some banks also has a problem in making some bad decisions when they are granting loans (one of main reasons for the bailouts here in the United States by the federal governments). Due to some of the bad decisions by banks, they in turn raise fees on some of the services to their customers.

Final Thoughts

When deciding where to open up an account or taking out a loan, always check out your options which is best for you and your family. Both banks and credit unions to a certain degree are very similar and you must weigh your choices before making your final decision.

Tags

Baking, Bank, Banks, Checking Account, Credit Union, Loan, Loans, Mark Gordon Browns Challenge, Savings Account

Meet the author

author avatar Clarence Schreiber
I work full time in a local grocery store. I am happily married for six years. I am also an online writer. come checkout my website at http://clarenceschreiberarthour.weebly.com for all my work.

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Comments

author avatar Denise O
6th Jan 2012 (#)

Good information on the pro and con of Banks and Credit unions. Thank you for sharing.:)

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author avatar Clarence Schreiber
6th Jan 2012 (#)

Your welcome.

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author avatar Buzz
6th Jan 2012 (#)

What a great response, my friend, to Mark's factual article challenge, exquisitely written. Thanks for sharing it with us.

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author avatar Clarence Schreiber
6th Jan 2012 (#)

Thank you, Buzz for your comment. It was interesting to write about it.

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author avatar Jerry Walch
6th Jan 2012 (#)

This was a very informative article, written in a language that everyone can understand.

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author avatar cnwriter..carolina
6th Jan 2012 (#)

Valuable info for us to ponder over, thanks

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author avatar Sheila Newton
6th Jan 2012 (#)

Nicely written and researched. Well done on an inspiring piece.

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author avatar Randy Duckworth
6th Jan 2012 (#)

Very interesting and informative! Thanks!

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author avatar CLH
7th Jan 2012 (#)

Very helpful information.

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author avatar CLH
7th Jan 2012 (#)

Very helpful information.

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author avatar Ivyevelyn, R.S.A.
7th Jan 2012 (#)

Thank you for this page, Clarence. I have often debated with myself over this and I was glad to read your page.

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author avatar Mark Gordon Brown
7th Jan 2012 (#)

You have done a good job on explaining some of the pros and cons of banks and credit unions.

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author avatar Delicia Powers
7th Jan 2012 (#)

Great information...thanks!

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author avatar ittech
28th Jan 2012 (#)

nice MSG

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