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While we promote use of specially designed life insurance as a warehouse of wealth for you money, this doesn’t mean you would entirely give up the institution of banking. Banks and credit unions are still needed to transact daily business like checking and deposits as well as the convenience of things like savings accounts, ATM and credit cards. We believe the bulk of your emergency / opportunity money should be stored in life insurance companies it just makes sense to keep some of your monthly needs in a checking or savings account at a local bank or credit union.

If you are not sure of the difference between a bank or credit union check out the article below.

When we talk about doing business without banks, we are primarily talking about loans for vehicles, equipment, vacations, education and other long term needs. We consider using a bank or credit union for the task of convenience.

Are you trying to decide between using a credit union or a bank? If so, there are a number of things you should know about both banks and credit unions. This list of facts will help you weigh your options.

What is a Credit Union?

A credit union is a financial cooperation that is member-owned. It is controlled democratically by its members as well. The mission of a credit union is, generally, to operate economically so the members can reap the benefits of having less expensive financial services and so credit can be provided at competitive rates.

How Does a Bank Differ From a Credit Union?

Banks are financial institutions that are owned by investors. The investors are oftentimes a myriad of stockholders or, they can be a lower scale group of large investors. There are both national and state banks.

Similarities between a Credit Union and a Bank

Both credit unions and banks offer the basic things you would need in a financial establishment. They have:

  • Checking accounts (personal and business)
  • Savings accounts
  • Auto loans
  • Home loans
  • Refinancing of home loans
  • Money market accounts
  • Certificates of deposits
  • Online banking

What are the Pros and Cons of a Credit Union vs. a Bank?

There are both pros and cons to both credit unions and banks. Here are some of them:

Credit Union Pros

  • Offer better deals
  • Don’t try to maximize profits at the expense of the customer
  • Pay more interest in savings and CDs
  • Low loan rates
  • Free checking
  • Money is insured

Bank Pros

  • Community banks often offer pros of credit unions listed above
  • Easily accessible
  • Most offer specialized services such as trust funds
  • Money is insured

Credit Union Cons

  • Not all credit unions adhere to the pros mentioned above
  • Receive tax breaks that are not necessarily passed back to members
  • May require eligibility
  • Specialty services may not be available

Bank Cons

  • Customer benefits are not as good as credit unions
  • Higher interest rates
  • Maximize profits
  • Customer service is not as personal as credit unions

How Do I Qualify for a Credit Union?

Credit unions are set up to where there is something the members have in common. To find one you qualify for, you may have to do a little searching, but chances are good you’ll find one somewhere. Here are some of the circles credit unions are offered in:

  • School
  • Church
  • Geographical area
  • Being related to a member
  • Organization membership

How Does it All Add Up?

Which is best, a credit union or a bank? Much depends upon what you want or need from a financial institution. If you are looking for an establishment for complicated, unique matters such as trust funds, etc., you may have better luck at a bank. If you are hoping to get some discounts and take advantage of lower interest rates, a credit union might suit you well. Finding information online or personally visiting a branch is the best way to find out.