You might be surprised to find out there are many substantial differences between credit unions and banks, including who they work for and the way they operate. Here are a few ways the two differ:
Ownership
One big difference between the two is ownership. Credit Unions are owned by their members. If you’re a member, that institution then is, in part, owned by you. Therefore, the credit cards and accounts you have at that institution are working for you. Banks, on the other hand, are owned by their shareholders. The credit cards and accounts a customer holds at a bank are working for the shareholders.
Who gets the profits?
Another main difference between banks and your local credit union is where the profits go. When you do business with a bank, the profits go to the investors. But with credit unions, which are non-profit entities, the profits are returned to the members (because they are the owners) in the form of lower interest rates and higher dividends.
Personalized service
A big benefit of being a member of a local credit union, like ITCU, is the ability to receive more personalized service than those who do business with larger banks. Because credit unions work with a smaller select clientele base, there is more personalization between the staff and the members.
Better rates and programs
The true benefits of a credit union are in the savings they can provide their members. Because they serve a smaller number of people and have relationships with private lending institutions, credit unions are able to offer rates that many banks cannot.
Guidance and education
Because the main purpose of a credit union is to promote financial responsibility among its members they always act within their members’ best interests. Sometimes this can mean hosting seminars on budgeting and saving and often it shows up in the form of lower loan rates and more convenient loan terms. Use your local credit union as a resource to arrive, and remember- ITCU is working for you and your financial well-being!