The Benefits of a Credit Union vs Bank Make the Choice an Easy One
Between 2013 and 2024, credit union membership increased by nearly 44% from 98.4 million to 142 million. This statistic makes it clear that more and more Americans across the nation are signing up to take advantage of a variety of benefits a credit union membership has to offer. Joining a credit union boasts several perks ranging from low fees to an array of loan products and services. As a partner to credit unions, AVANA CUSO understands the true benefits of credit unions vs banks. The following are the five major benefits of a credit union and why to choose a credit union vs bank.
When considering financial institutions for your borrowing and banking needs, the choice often comes down to credit unions versus banks. While both provide essential financial services, credit unions offer unique benefits that can be especially advantageous for borrowers and businesses seeking competitive loans, personalized service, and community-driven financial solutions.
Benefits of Credit Union vs Bank
There are multiple benefits of Credit unions vs banks. Let’s check some of the important points
Personalized Customer Service
At a credit union, you aren’t just a customer, you’re an owner, and treated like one. Local credit unions offer a superior level of personalized customer service that big banks simply aren’t equipped to provide. As a nonprofit institution, a credit union focuses its efforts and profits on assisting members with financial needs, educating and training them on investment options, and counseling them on complex financial matters, such as business loans. They prioritize all these member perks over making profits.
Wide Variety of Financial Services
Credit unions provide an assortment of personal and business banking services to their members. You can acquire checking accounts and savings accounts, credit and debit cards, investment accounts, auto loans, and mortgages. Many credit unions also offer money transfers, online and mobile banking, and mobile payments and wallets.
Equally, business owners can obtain business checking and savings accounts as well as credit cards. Many credit unions also provide an array of business loan options.
Great Interest Rates
Credit union members have the opportunity to capitalize on low loan rates and high savings rates. When borrowing a loan—whether it be a commercial real estate loan or a personal loan—the interest rates are typically lower than those of other financial institutions and banks. Because credit unions are not-for-profit organizations, they’re able to give profits back to their members in the form of higher interest rates on savings accounts.
Lower Fees
In addition to lower interest rates, credit unions typically have fewer and lower fees. For those who join a credit union, it’s unlikely you’ll encounter overdraft fees. And if you do, they’ll be minimal compared to banks.
Insured Deposits
When becoming a member of a credit union, there’s no need to worry about the security of your investments. Federal credit unions are insured by the National Credit Union Administration through the National Credit Union Share Insurance Fund. Backed by the U.S. government, federal credit unions cover member deposits up to $250,000. State-chartered credit unions, on the other hand, are typically insured by private institutions.
Easier Loan Approval Process
Small business owners and entrepreneurs often face challenges when trying to secure loans from traditional banks due to rigid approval criteria and lengthy processes. Credit unions, on the other hand, tend to be more flexible and willing to work with borrowers who may not meet the stringent credit requirements of big banks. With a mission to support community growth, credit unions assess applications based on a holistic view of the borrower’s financial situation rather than just their credit score.
Member Ownership and Community Focus
Credit unions operate as member-owned cooperatives, meaning that profits are reinvested into the institution to benefit members rather than shareholders. This model fosters a strong sense of community and ensures that members receive competitive rates and better services. Businesses that align with a credit union gain a financial partner that is invested in their success and the local economy.
Enhanced Customer Experience and Trust
Trust is a critical factor when choosing a financial institution. Many credit unions, including AVANA CUSO, are deeply rooted in ethical banking and transparency. This customer-first approach ensures that members feel valued and supported throughout their financial journey.
Why the Benefits of a Credit Union Outweigh Those of a Bank
Overall, becoming a member of a credit union typically yields greater benefits than storing your finances in a larger bank. With a credit union, you’ll enjoy a higher level of personalized customer service, more control over the organization since you’re a member and significant savings via lower rates and higher returns.
But the biggest benefit of a credit union vs bank? Banks are for-profit institutions interested in making a profit off your finances, while credit unions are non-profits looking to reinvest back into their members and communities.
About AVANA CUSO
Established in 1998 and headquartered in Simi Valley, CA, AVANA CUSO offers competitive and collaborative commercial loans. We partner with credit unions and brokers and connect them to investors across the United States. Additionally, we uniquely support and guide our partners through the entire full lifecycle of loans. AVANA CUSO is a proud member of the AVANA Family of Companies.
