If you’re in Vancouver, WA, and curious about the differences between credit unions and banks, you’ve come to the right place. We’ll break it down for you below so you can make informed financial decisions.
Ultimately, credit unions and traditional banks both play pivotal roles in the financial sector, offering a range of financial services to individuals and businesses. However, despite their similarities in providing savings accounts, loans, and other financial products, credit unions and banks are distinct entities with differing structures, purposes, and ways of operation.
If you would like to become a member or would like to learn more keep reading or contact one of our local branches.
Credit Unions vs Banks
The primary difference between credit unions and banks is ownership.
Banks are for-profit companies with a primary obligation to their shareholders. They make money by charging interest on loans and collecting account fees.
Credit unions, on the other hand, are not-for-profit institutions owned and controlled by their members, which are account holders. Since credit unions operate to serve their members, the money that would have been profit is instead used to help credit union members. An example would be how People’s provides all members with the same loan rates regardless of their credit score or the amount in their accounts.
The Pros and Cons of Credit Unions
Not sure if a credit union is right for you? Here are a few pros and cons to consider when making your decision.
Major Advantages of Choosing a Credit Union:
For many people, the main advantage of credit unions is that they have lower interest rates for credit cards and tend to offer better savings and loan terms. They also offer a more personalized experience and there is often no minimum, or a very low minimum amount needed to open an account. For example, at People’s, our membership begins with a $5 fee and a $50 deposit into your Carefree savings account. Then, if you open any other deposit account all you need to do is maintain $5 in your Carefree savings account.
What really sets a Credit Union apart are the membership benefits. At People’s, these include:
- Part of a not-for-profit financial cooperative where you’re an owner, not just a number
- Everyone gets the same rate on loans; including mortgages, auto loans, and lines of credit
- Better dividend rates on deposit accounts and lower fees; Dividends are paid to members, not shareholders
- Free online, telephone, and mobile banking, eStatements, and Bill Pay
- Checking accounts with no monthly fee or minimum balance requirements
- ATM access at thousands of surcharge-free ATMs nationwide*
- Personalized, friendly service from our happy employees
- Supports local organizations and initiatives for the betterment of the community in which members live and work.
*You will be charged a minimal transaction fee for using a non-People’s ATM.
At People’s, your money is also safe. Our credit union is federally insured by the National Credit Union Administration (NCUA). It covers $250,000 per account holder, per institution. This insurance protects your money the same way the Federal Deposit Insurance Corporation (FDIC) does at banks.
Credit Union Disadvantages:
Like any financial institution, credit unions come with their own set of limitations and challenges including:
- Limited Accessibility: Credit unions may have fewer physical branches and ATMs, which could be inconvenient for members who travel frequently or live outside the service area.
- Membership Requirements: Some credit unions require members to meet certain eligibility criteria, such as living in a specific area or working for a particular employer.
- Membership Costs: While credit unions often have lower fees, they may require an initial membership deposit.
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What Services Do Credit Unions Offer?
The products and services available at banks are virtually the same at credit unions, including:
- Checking accounts and ATM/debit cards
- Savings accounts
- Credit cards
- Money market and IRA accounts
- Certificates of deposit (CDs)
- Auto and recreational vehicle loans
- Home loans
- Online and Mobile Banking
- And more!
What Do You Need in Order to Open an Account at a Credit Union?
Before you can open an account at a credit union, you must first qualify for membership. At People’s, joining is quick and easy. You’re eligible to become a member if you live, work, or worship in Clark, Cowlitz, or Skamania Counties. And if you have a family member who is a current member, you’re eligible regardless of where you live! Once you join People’s, you have access to thousands of surcharge-free ATMs nationwide and you’ll receive free online, telephone, and mobile banking. We also have five convenient branches located throughout Clark County.
Should You Join a Credit Union?
Credit unions provide robust financial services and offer excellent member service. When choosing a credit union, it ultimately comes down to the products and services you’re looking for. If you’re interested in becoming a member with People’s today, visit one of our five branches, or easily open an account on our website!
How Are Credit Unions and Banks Different? in Vancouver WA
Serving Greater Vancouver WA