Bank Vs Credit Union

Bank vs. Credit union Choosing a bank or credit union can be tricky. A bank is a business that holds onto your money for you and uses it to create profits by investing that money, and loaning it out to other customers. In a credit union when you deposit your money you’re actually buying shares of the company. Rather than being a customer, you’re part “owner”. They both have checking and savings accounts including CDs and specialize accounts. You can deposit your checks and withdrawal money from ATMs, debit, credit cards. Loans and mortgages are all similar. I’m going to be focusing on Tapco credit union because that’s what I would use personally. Bank of America is the financial institution that my parents use. The benefits of using a bank is that you don’t have to carry large amounts of money in your pockets or worry about how much money you have because it is all taken care of in a bank. Most banks are FDIC (Federal Deposit Insurance Company) whether it’s a savings, checking, trust fund, certificate of deposit or Roth IRA account, it’s insured. Using a banking service like an account is a good way to protect your assets. . A disadvantage can be that you get hidden charges in your account sometimes and that can lead to different penalties in your credit accounts because you didn’t pay for item. My father gets these charges a lot and it turns out it is like an advertisement or hack. So, that is something that you should pay attention to. The danger with either situation is that if money is stolen or lost, it cannot be replaced. Most credit unions are small local institution it can be hard to get your money without visiting a branch. Also, a drawback is that using ATMs and traveling can lead to major fees. Advantage is if your credit union fails, you are protected by the NCUA insurance. Whichever you are using bank or credit union you are insured. Banks and credit unions have different accounts for different people and needs. For example, Tapco credit union here in Tacoma has many checking accounts that have no required minimum balance or monthly service charge. So, to have a credit union it would be less money to start, there’s just a $5 requirement in order to open account at Tapco credit union. Like I’ve said previously credit unions may give ATM fees when you use one, which maybe the only downsize. At Bank of America their checking accounts require monthly maintenance fees up to 25 dollars depending on the account you choose. Including, you need to have up to 250 dollars as a direct deposit and to maintain an average daily balance of 1,500 dollars. A lot of money can go into a bank account, so you would need to keep track of your deposits and withdrawals to make sure that you don’t get money added to it. Bank of America also has no ATM fees for B.O.A (Bank of America) ATMs. When using a non-B.O.A ATMs there’s a fee for $2.50, $ 5.00 outside of the country. I would choose a credit union because the interest rates and mortgage rates are lower than as banks. In general, credit unions offer higher savings rates, meaning that your money grows faster, and lower rates on loans, meaning that you will owe less over the lifetime of the loan. Credit unions also tend to charge less in fees and offer better interest rates on credit cards. The interest rates available on credit cards issued by both banks and credit unions are directly affected by the amount it costs banks and credit unions to borrow money. Financial institutions fund credit cards and other loans with money borrowed from the government, as well as funds held in deposit accounts. However, credit unions only need to raise enough money to covering operating costs, while banks need to cover costs and generate profits. Consequently, interest rates on credit cards from credit unions are usually lower than on cards offered by banks.

In Conclusion, I would choose a credit union over a bank because the fees and penalties of having a checking account is less likely than a bank, the interest rates are lower, and it would be easier to start an account at a credit union by giving the requirement amount in order to start. I believe it’s easier overall, the only downsize of having an account at a credit union would be limited access to getting money because there may not be many branches around depending on the credit union you use. On the bright side if your credit union fails, you are likely protected by the NCUA insurance company.