Credit Unions vs. Banks: Which One Is Best for You?
3 min. read
By: FCU Team
You may hear us talk about “the credit union difference” but what does it really mean? The key to improving your financial health is having the right financial institution in your corner. While banks and credit unions might just sound like different sides of the same coin, there are significant differences that potential account holders should know before trusting either with your money. Keep reading for a full rundown on the similarities and differences between these two institutions so you can be empowered to make the decision that’s best for your financial health.
The Similarities Between Credit Unions and Banks
No matter which institution you choose, you can be confident in the fact that your money is federally insured. For banks this means backing from Federal Deposit Insurance Corporation (FDIC) and for credit unions this comes from the National Credit Union Administration (NCUA) which was created in the 1970s to insure money in credit union accounts.
Additionally, credit unions and banks offer very similar banking services, including but not limited to:
- Personal & commercial banking products
- Business credit cards
- Business loans
- Certificates of Deposit
- Mortgages and home equity loans
- ATMs & mobile banking
The Differences Between Credit Unions and Banks
Beyond banking services available and the confidence of your money being insured, credit unions and banks have many distinct traits you should be aware of before you open your account. The key difference between the two institutions is that banks are for-profit while credit unions are not-for-profit.
Banks have to answer to their stockholders, as they are either privately owned or publicly traded. Because of this, banks’ goals may not always align with the needs of their account owners, as their main focus is generating profit. Some of the ways banks make their profit include higher rates on loans, additional fees, lower annual percentage yields (APYs) and more. In the past, their edge was found in that they could offer a wider range of mobile banking tools, but in recent years credit unions have closed this gap and can now offer members similar conveniences for on-the-go banking.
Because credit unions are not-for-profit, they answer solely to their members. Profits earned are retained to meet the needs of the members and credit union. When the focus shifts from turning a profit, members benefit in the way of lower fees, lower rates on loans, higher APYs and more. At Florida Credit Union, potential members can join for free and not only have a safe place to keep their money, but endless opportunities to save it.
Credit unions are also famous for their unmatched customer service. For example, Florida Credit Union prides itself on having fast, local service that is rooted in hospitality and a thorough understanding of financial wellness. Our commitment to serving our members well means you benefit from more flexibility in your decision making and services that are truly tailored to your needs.
How to Decide if a Bank or Credit Union Is Right for You
At the end of the day, you should choose the financial institution that you trust to help you get to where you want to be in your financial journey and most closely aligns with what you value. It’s essential that you have an institution that cares for your needs above all else and is ready to work with you to get you the savings and financial security you deserve.
Experience the Credit Union Difference
Are you ready to take the next step and experience the difference that banking with a credit union can have on your finances? We’re here to help. As an FCU member, you’ll be an owner of one of the strongest financial institutions in North Central Florida.
With products and services like checking, money market accounts, club accounts, loans of any kind, credit and debit cards, online banking, commercial banking, and more, we're a fully functional financial institution, but with roots that start very close to home. We support local business, charitable organizations, our community — and most importantly, we strive to support you. Make your next best financial decision today and apply for membership to a member owned, community proud credit union.