Bank or credit union? That’s a question most will have when deciding where to begin their financial journey.
Credit unions are often misunderstood. In fact, some common misconceptions about credit unions are that strict requirements exist for membership and that credit unions don’t have up-to-date technology. Both may have been true in the past but are no longer the case. With OneAZ Credit Union, for instance, anyone who lives, works, worships or attends school in Arizona is eligible to join. And technology enables banking “whenever and wherever” thanks to mobile banking apps that put credit unions at least on par with national banks.
For-profit versus not-for-profit: Unlike traditional banks, credit unions are not-for-profit. That means credit unions can put their profits back into their services, resulting in lower account fees and lower interest rates on loans. Because they are usually based in the local community, credit unions also tend to have more flexibility in decision making.
Local and community-based: Banking with a local credit union keeps money circulating in the local community. Local deposits fund local loans made to local residents or businesses, which strengthens the economy of the town, county and state where the transactions take place. The local aspect is also a differentiator between national banks and community banks.
Lower rates: Credit union members traditionally have access to lower interest rates for home and auto loans. Because credit unions are not-for-profit, they’re able to return their earnings back to members in the form of lower interest rates and lower fees. This translates to lower monthly payments and extra savings.
FDIC versus NCUA: The Federal Deposit Insurance Corporation insures traditional banking institutions for up to $250,000 per depositor, per insured bank, for each account ownership type should the bank fail. Similarly, the National Credit Union Administration provides member protection for credit unions. Because members own a share in their credit union, NCUA guarantees up to $250,000 per share owner, per insured credit union, for each account ownership type if the credit union closes or goes into a conservatorship.
Another difference derives from the fact that the relationship with the banker is built on the client being a member rather than a customer.
“Our ultimate goal is to improve the lives and financial well-being of our members, not maximize the stock price for stockholders,” says Kim Reedy, president and CEO of OneAZ Credit Union. “We’ve been helping Arizonans for over 70 years and remain dedicated to supporting social programs and economic development in our communities.”