Credit Union vs. Bank

If you’ve ever wondered about the difference between a credit union and a traditional bank, Studio 10’s Derica Williams gets the answer from Deb Domke with New Horizons Credit Union.

A credit union is a not-for profit financial cooperative chartered by either the Federal or State. It is controlled by its members instead of shareholders, which allows for lower rates on loans and higher rates on savings.

The two types of credit unions are employee structured and community chartered.

A bank is publicly traded and conducts business to maximize earnings, and they return their profits to stockholders of the bank.

Also, everyone is eligible to do business with a bank, unlike credit unions which have limitations.

Today, credit unions and banks offer very similar products and services. Depending on the size of the credit union, you may find more specialized savings products or smaller loan products. Larger banks may offer more mobile banking options and commercial products and loans for businesses.

Here are a few things to think of when you are deciding on a bank or a credit union.

• Think about your own personal goals and needs.
• Rate driven for a consumer loan or savings then you may want to consider a credit union.
• If you want multiple branches then a bank may be your better option.
• Or if you are looking for business products a bank may be able to serve you better.
• Both financial institutions can serve you well; it just depends on your financial goals.
   

New Horizons has offices in West Mobile, Mid-town Mobile, Theodore, Prichard, Semmes, Saraland, Daphne and Foley. For more information you can call (251) 316-3240 or log onto www.newhcu.org .