Banking

BANKS vs CREDIT UNIONS
What are the major differences between Federal Credit Unions and big banks? Here is a comparison that our advisor believes is fair.

ACCESSIBILITY

Banks


Probably the biggest reason retail bank customers are sticking with banks is accessibility. ATMs are typically plentiful and branches are open on the weekend if ever customers need to make a quick withdrawal or deposit. On top of that, most major banks offer a wealth of mobile and online tools that make banking on-the-go a cinch.

Credit Unions


Because credit unions are meant to serve local communities, they are most often not available outside of a particular area, and branded ATMs are practically nonexistent. To compensate, most credit unions offer to reimburse customers for ATM fees if customers have to go out of network, which means credit union customers are able to use any ATM for free, or use a shared ATM network. And since many credit unions also offer mobile banking options, customers can search for nearby ATMs in their area. However, some credit unions cap the amount they’ll reimburse for ATM fees, typically around $15 per month.

CHECKING ACCOUNT FEES

Banks


Big banks are notorious for levying major fees against customers for everything from overdrafts to monthly maintenance fees. Then, also, there’s the charge for using out-of-network ATMs, which is now running at more than $2.00 per transaction.

Credit Unions


Unlike retail banks, which have large overhead costs and spend a lot of money to manage millions of accounts, credit unions are typically smaller operations and
and are able to pass on their overhead savings to customers. That means fewer fees across the board for the most part. More than 70% of the largest credit unions offer free checking, compared to 39% of banks, according to Bankrate.com. Overdraft fees run around $20 to $30 a pop, and while many credit unions do charge monthly maintenance fees ($2 to $5), customers don’t have to keep anywhere near as much
cash in their accounts to escape them ($30 or less in most cases), as compared to banks, according to Bankrate.com.

INTEREST RATES

Banks


Interest rates fluctuate all the time, and even savings accounts at big banks are yielding next to nothing for account holders at present.

Credit Unions


Credit unions are known for offering higher-yielding savings and checking accounts, but recently, not much. Rates are so low it’s probably not enough to convince bank customers to go through the hassle of switching banks.

CUSTOMER SERVICE

Banks


Banks had a better year with customers in 2012 but even the largest banks still trail the small banks, which tend to offer more personalized service, free checking, and lower fees, a recent report says.

Credit Unions


As the saying goes, more money means more problems. As credit unions have been inundated with new customers, their customer service rates have taken a hit but they were still rated the highest overall for banking services.