Four Benefits of Credit Union Checking Accounts
Published on: December 30, 2021
When people think about where to open a checking account, they often forget about one very important choice – their local credit union. Financially, you owe it to yourself to consider all options, including credit unions, for meeting your financial goals. Here are four benefits of becoming a member of and opening a checking account at a local credit union.
Although most banks offer customers ways to avoid monthly service fees, many customers are unable to meet the waiver requirements. In Bankrate’s recent checking account survey, the average monthly balance required to avoid monthly service fees jumped 31% from $7,550.42 in 2020 to $9896.81 in 2021. In 2021, the average monthly maintenance fee rose to $16.35 – a 5.5% increase from the previous year.
Credit unions that charge monthly service fees also offer their members ways of avoiding monthly service fees. However, the average balance requirements are generally much lower. In addition, many credit unions offer alternative ways to avoid fees, such as establishing direct deposits, making a certain number of debit card transactions per month, and even meeting certain occupational requirements.
Although some credit unions require members to work for a specific company or in a specific profession, many credit unions only require their members to live in a specific geographical area. If members change jobs or move out of the area, they can still remain credit union members.
Furthermore, banks may not allow people with poor credit to open accounts, whereas credit unions are more willing to work with potential members who have poor credit by providing specialty checking & savings accounts. Additionally, expensive monthly fees and high average balance requirements make being a bank customer cost prohibitive.
While the goal of many bank policies and practices is to increase net profits, the goal of most credit union policies and practices is to enhance the products and services that members receive since credit unions are member-owned and member-run. As a result, credit unions tend to be more member-centric financial institutions where service is more important than sales. In addition, credit union branch managers are generally more empowered to make decisions in the best interest of their members.
Ultimately, deciding between opening a checking account at a bank or a credit union depends upon your financial needs and goals. Just remember, credit unions offer many of the same products and services as banks but often with lower fees and higher deposit interest rates.
When people think about where to open a checking account, they often forget about one very important choice – their local credit union. Financially, you owe it to yourself to consider all options, including credit unions, for meeting your financial goals. Here are four benefits of becoming a member of and opening a checking account at a local credit union.
Lower Fees and Higher Rates
Banks generally charge higher fees and pay lower interest rates on deposit accounts and assess higher interest rates on loans than credit unions. Why? Because banks focus on making money for their shareholders, while credit unions focus on making financial products and services affordable for their members.Although most banks offer customers ways to avoid monthly service fees, many customers are unable to meet the waiver requirements. In Bankrate’s recent checking account survey, the average monthly balance required to avoid monthly service fees jumped 31% from $7,550.42 in 2020 to $9896.81 in 2021. In 2021, the average monthly maintenance fee rose to $16.35 – a 5.5% increase from the previous year.
Credit unions that charge monthly service fees also offer their members ways of avoiding monthly service fees. However, the average balance requirements are generally much lower. In addition, many credit unions offer alternative ways to avoid fees, such as establishing direct deposits, making a certain number of debit card transactions per month, and even meeting certain occupational requirements.
Fewer Minimum Requirements
Some critics of credit unions say they exclude people from joining where banks are open to all consumers. That might be true on the surface, but let’s take a closer look.Although some credit unions require members to work for a specific company or in a specific profession, many credit unions only require their members to live in a specific geographical area. If members change jobs or move out of the area, they can still remain credit union members.
Furthermore, banks may not allow people with poor credit to open accounts, whereas credit unions are more willing to work with potential members who have poor credit by providing specialty checking & savings accounts. Additionally, expensive monthly fees and high average balance requirements make being a bank customer cost prohibitive.
Outstanding Customer Service
The customer service you experience at credit unions is often far superior to that of their bank competitors. Why? Banks are for-profit businesses established to make money for their owners and shareholders. Credit unions are not for profit organizations that exist to meet the financial needs of their members, who are also share owners of the credit union to which they belong.While the goal of many bank policies and practices is to increase net profits, the goal of most credit union policies and practices is to enhance the products and services that members receive since credit unions are member-owned and member-run. As a result, credit unions tend to be more member-centric financial institutions where service is more important than sales. In addition, credit union branch managers are generally more empowered to make decisions in the best interest of their members.
Same Protection for Your Money
Credit unions are safe and secure places to deposit your money. Like the protection offered by the FDIC, the National Credit Union Administration (NCUA) guarantees deposits up to $250,000.Ultimately, deciding between opening a checking account at a bank or a credit union depends upon your financial needs and goals. Just remember, credit unions offer many of the same products and services as banks but often with lower fees and higher deposit interest rates.