What are the Differences Between a Bank and Credit Union?

posted in: Blog 0

While banks and credit unions both offer financial services, there are a few key differences between them. 

 

Keep reading to discover a few of the main differences between a bank and credit union like Camino Federal Credit Union. 

a person at a bank teller window hands over cash
While banks and credit unions offer many of the same services to members, there are some key differences between the two.

Better Rates

One of the biggest differences between a bank and credit union that will have an impact on your finances is that credit unions can often offer more favorable rates compared to banks because they are owned by the credit union members instead of stakeholders. This means that your savings accounts could earn more interest with a higher interest rate on those accounts. 

 

On the other hand, on loans from a credit union (such as an auto loan or mortgage) those interest rates could be lower, meaning that you could pay back less interest over time. 

 

Earning more interest on your savings while paying back less interest on loans can mean more money in your savings accounts. 

 

Member Service Oriented 

Another  difference between a bank and credit union is that credit unions often place more emphasis on member service while big, national banks aren’t usually known for excellent member service. 

 

In the case of Camino Federal Credit Union, we believe that your financial institution should be a team dedicated to your financial success and that your unique financial needs are understood and met with exceptional member service. 

 

Locally Focused with National Accessibility

It is a common misconception that one of the differences between a bank and credit union is that banks, especially national banks, are more accessible to members since they have more locations. 

 

While banks may have more brick and mortar locations, credit unions can offer national accessibility too in terms of partner ATMs that will let you access your cash with no fee. 

 

Both national banks and credit unions often offer online banking and mobile banking apps so that you can access your accounts from almost anywhere in the nation or the world. 

 

However, one of the true differences between a bank and credit union is that credit unions are typically more locally focused with strong community roots. In the case of Camino Federal Credit Union, we have been caring for the financial needs of our Montebello community since 1941. Fun fact: we were originally named Montebello Schools Federal Credit Union and we  began as a credit union to serve employees of the Montebello Unified School District, but today we are proud to serve members from many industries, backgrounds, and age groups.

 

It’s clear that there are differences between a bank and credit union, and that your personal financial situation may help determine where is best for you to keep your money. 

 

Do you need help managing your finances? Let us know!

 

It can be challenging to balance your savings, loans, and other accounts all in one place. However, we offer many ways to manage your finances at Camino Federal Credit Union through our branch location, online banking, and mobile banking app. Please give us a call at 800-835-3400 to speak with one of our Member Advisors, or contact us online at caminofcu.org for more information.