Benefits of Banking with a Credit Union
Need a place to store or manage your money? Your first instinct might be to turn to a bank, but that’s not your only choice. In fact, there could be a better option for your needs: local credit unions.
These member-owned financial cooperatives offer a different kind of banking experience – one that’s often more community-centered, cost-effective, and personally rewarding. In this article, we’ll explain why banking with a credit union may be a smarter choice for many individuals and families.
Why bank with a credit union?
Credit unions are not-for-profit institutions owned by their members, not shareholders. That sets an important tone for how they operate.
While banks focus on generating profit, credit unions exist to serve their members. This mission-driven approach often results in better rates, lower fees, and more personalized service.
Many people associate credit unions with limited access or niche membership requirements. These days, however, that’s not necessarily true.
In fact, joining a credit union is often as simple as living in a specific region, working in a particular industry, or joining an associated organization. And thanks to national networks, many credit unions offer robust access to branches and ATMs, rivaling or even exceeding the convenience of traditional banks.
Advantages of local credit unions
Compared to banks, local credit unions have several important features that could make them a better choice for your financial needs. Let’s take a closer look at why you might choose a credit union.
Higher APYs on deposit accounts
One of the best perks of credit unions? The potential to earn more on your deposits.
Because credit unions are not driven by profit, they typically return their excess earnings to members in the form of higher dividends on savings accounts, money market accounts, and share certificates (also known as certificates of deposit, or CDs). In other words, your money grows faster with a credit union than it does with a bank.
Here's an example:
- A big-name bank might offer 0.01% to 0.05% APY on a basic savings account
- Meanwhile, a credit union could provide an APY of 0.25% to 1.00% APY (or more) for the same account
Of course, this depends on the account type and market conditions. Generally speaking, the better average dividends credit unions offer can add up significantly, making your money work harder for you.
Lower loan interest rates
On the borrowing side, credit unions also tend to offer lower interest rates on a wide range of loans, from auto loans and personal loans to mortgages and credit cards. That’s a direct result of their member-focused model: When a credit union makes money, it reinvests those funds into better rates and services for its members.
Say that you find a new auto loan rate at a credit union that’s 1 to 2 percentage points lower than a comparable offer from a commercial bank. On a $25,000 loan, that difference could save you hundreds – even thousands – of dollars over the life of the loan.
This affordability extends beyond interest rates, too. Credit unions are known for being more flexible with credit qualifications, often working with members to find solutions when traditional banks would say no.
Lower fees
Let’s face it – banking fees are one of the most frustrating parts of managing your money. From overdraft penalties and monthly maintenance fees to ATM charges and minimum balance fees, banks seem to have a fee for everything. Credit unions, on the other hand, may have lower fees and many offer checking accounts with no monthly maintenance fees.
Shared credit union branches and ATM access
You might have heard that credit unions are small, local, and inconvenient. While many credit unions do prioritize their local communities, they’ve also joined forces through nationwide networks to expand their reach.
For example, Sharonview participates in a Co-Op network that allows members of participating credit unions to access over 5,000 shared branches across the country. These branches function much like your home credit union location, allowing you to make deposits, withdrawals, loan payments, and more.
On top of that, members often have access to tens of thousands of surcharge-free ATMs through the same network. Whether you’re traveling, relocating, or just running errands across town, your money is always within reach when you bank with the right credit union.
Personalized service
If you’ve ever felt like just another number at a big bank, you’re not alone. Fortunately, local credit unions pride themselves on offering a different experience – one where you’re treated like a valued member of the community, not a faceless account number.
Since they serve a smaller, more defined member base, credit unions often take the time to build real relationships with their members. It’s not uncommon to walk into a credit union branch and be greeted by name. That kind of service extends beyond courtesy – it translates into better financial advice, more flexible lending decisions, and a willingness to go the extra mile.
And since credit unions are owned by their members, you have a say in how things are run. Members can elect the board of directors who determine key decisions and credit union policies, giving you influence over the direction of your financial institution.
Choose a credit union for a better banking experience
For anyone frustrated by high fees, high interest rates, or impersonal service, switching to a credit union can be a game changer. Traditional banks still have their place, but local credit unions offer a better alternative for everyday banking needs. They combine competitive financial products, like checking accounts or home equity loans, with a community-first mindset, delivering real value to the people they serve.
Whether you're looking to save more, borrow smarter, or simply feel like your financial institution has your back, a credit union might be exactly what you need – so look into local credit unions like Sharonview today!