Credit Unions vs. Banks: Where to Open Your Checking Account?
Many consumers opt for banks because of accessibility. Larger banks offer convenient access to ATMs and often feature weekend hours for withdrawals or deposits. Most banks also feature online and mobile tools to transfer funds or access account balances. Credit unions serve local communities and do not typically have ATMs outside of the local area; however, consumers can access their credit union checking accounts utilizing online and mobile tools.
Checking account fees can quickly deplete an existing balance if consumers are not careful. Big banks typically charge higher maintenance and overdraft fees than credit unions. Credit unions are smaller operations with smaller overhead costs and have the advantage of passing on savings to their customers. As a result, consumers typically face fewer fees when opening checking accounts at credit unions. Some banks, though, feature overdraft protection and free checking accounts to minimize the fees consumers incur.
Interest rates fluctuate rapidly, and banks and credit unions seek to offer competitive rates to consumers. In past years, credit unions have been able to offer high-yielding savings and checking accounts, but banks are slowly gaining a competitive edge by matching these rates. Consumers must investigate the amount of interest involved in opening a checking account and determine the long-term fees that will be assessed by banks and credit unions before opening an account.
Customers need to feel appreciated, especially when trusting their financial future with an institution. Credit unions often have an advantage over large banks because they are community-based and local, which means employees often become familiar with their clients, both at the financial institution and within the community. Banks, though, often strive to improve the customer service by providing call centers and online resources for greater accessibility and contact with clients. The ability to connect with a client personally and professionally relies heavily on the mission and goals of the institution.
Consumers have options when it comes to placing their money at a secure financial institution. Opening a checking account requires research into which type of institution offers benefits that are convenient and profitable for the consumer. Account holders should know the pros and cons of both banks and credit unions to determine an appropriate financial fit.