Bank or Credit Union? How to Pick the Best One for You

Whether you are looking to open your first savings account or take advantage of a loan from a financial institution, it can be difficult to decide between a bank and a credit union.

Both offer different services and products with varying fees and interest rates, so it’s important to know what sets them apart to make an informed decision. 

Let’s look at some differences between banks and credit unions that can help you pick the best one for your needs.

Services Offered by Banks and Credit Unions

The first difference between banks and credit unions is what they offer. Banks have more services than credit unions typically do. 

This includes investment options such as CDs, bonds, stocks, mutual funds, IRAs, and other products that allow customers to diversify their portfolios. 

Credit unions, such as Credit Union of Denver, usually don’t offer these services; instead, they focus on loan products such as mortgages, auto loans, personal loans, and business loans.

Fees

Another major difference between banks and credit unions is fees. Generally speaking, banks charge higher fees than credit unions do for their services. 

This includes ATM fees if you use an outside networked machine rather than one from your financial institution. Additionally, many banks will charge monthly maintenance fees on accounts with low balances or require minimum deposits for certain accounts that may not be required at a credit union.

Interest Rates

Finally, banks tend to have higher interest rates when it comes to loan products like mortgages or car loans compared to those offered by credit unions. 

Credit unions often have lower interest rates because they are non-profit institutions owned by members rather than shareholders who expect profits in return for their investments. 

Of course, there are always exceptions depending on the financial institution. However, this is generally true across the board when comparing banks versus credit unions regarding interest rates.

In conclusion, both banks and credit unions have their own unique set of benefits that make them attractive options when choosing a financial institution for your needs. 

It's important to consider all of the factors discussed here before making a final decision about which type of institution is best for you—from services offered to fees charged—as well as any other additional features or policies that may apply at either type of establishment. 

Ultimately it boils down to finding the right balance between price and value that meets your individual needs.