Credit Unions vs. Banks - Patelco Credit Union | Personalized Banking and Financial Services (2024)

FAQs

Is it better to bank with credit union or bank? ›

Credit unions can be ideal for a low-interest loan, lower mortgage closing costs, or reduced fees, but you'll need to qualify for membership. Larger banks may offer you more choices regarding products, apps, and international or commercial products and services, and anyone can join.

Larger banks will give you access to a wide network of ATMs and brick-and-mortar locations. Credit unions have large ATM networks as well, but may not give you the same face-to-face access.

Cons of credit unions

Limited access: Credit unions usually serve a specific community or region, resulting in fewer branches and ATM access. Fewer product options: While credit unions offer many of the same products as banks, you may not have as many options for each as you would with a bank.

The five largest credit unions are Navy Federal Credit Union, State Employees' Credit Union, PenFed Credit Union, SchoolsFirst Federal Credit Union and Boeing Employees Credit Union.

One question that often arises is, "Are Credit Unions Safer than Banks?" If you're looking for a short answer, you'll be happy to know that we're not making you read the whole post: Credit Unions and banks are roughly identical in safety because deposits at both are insured by the Federal government to $250,000.

Credit unions are known for offering better interest rates on savings, loans, credit cards, and dividends. Additionally, they often have lower fees compared to traditional banks, helping you save money in the long run. Access to shared branches and ATMs.

Member-owned: Because members share ownership in credit unions, they have a greater say in operations than bank customers. This often leads to superior customer service. Lower fees: Because credit unions are not-for-profit, they typically charge lower fees than banks.

Credit unions may be local or regional, with limited branches outside of your area. If you travel or move, this can make getting in-person help difficult. May have fewer services. While many larger credit unions offer all of the same services banks do, some provide a limited range of products and services.

What do credit unions offer that banks do not? ›

Credit unions go beyond standard banking, offering lower fees on loans, higher dividend rates on accounts, and more personalized member benefits. Unlike for-profit banks focused on maximizing shareholder profits, credit unions are member-owned, non-profit financial institutions.

Credit unions and banks are both insured, with most banks being insured by the Federal Deposit Insurance Corporation (FDIC) for up to $250,000 per customer. Most credit unions are similarly insured by the National Credit Union Administration (NCUA) for up to $250,000.

Organization: SchoolsFirst Federal Credit Union has more than 30 billion in assets and serves 1.4 million school employees and their families. It has 69 branches and more than 300 ATMs statewide. Members can also access a cooperative of thousands of free ATMs there and nationwide.

National Credit Union Administration (NCUA) credit unions had five conservatorships/liquidations in 2023, and one so far in 2024. Similarly, there were five Federal Deposit Insurance Corp. (FDIC) bank failures in 2023 and one bank failure so far this year.

Generally, credit unions are viewed as safer than banks, although deposits at both types of financial institutions are usually insured at the same dollar amounts. The FDIC insures deposits at most banks, and the NCUA insures deposits at most credit unions.

In addition, credit unions tend to take lower risks compared to banks. They maintain conservative lending practices and focus on member services rather than profit. Because they are not driven by the same profit motives, they may be less exposed to risky financial behaviors that can lead to instability.

Credit unions tend to offer higher interest rates for savings accounts than banks. Lower loan rates. Credit unions typically charge lower interest rates for loans than banks. Lower fees.