Are Credit Unions Better than Banks for Loans, Checking Accounts?
Why Are Credit Unions Better than Banks?
Without the free checking and with the increasing fees of banks, you may benefit more from a credit union.
Credit unions basically have better deals on loans, checking accounts and other products compared to banks. And it is easier to join them at the present times because there are around 7,000 of them nationwide.
However, there are cases when you are only eligible for basic services. This means that you cannot have online banking or other perks that banks offer.
Credit unions are already beating banks nationwide because of their nonprofit nature and their members’ ownership. Because of this, they can offer the best possible deals says Bankrate.com’s senior financial analyst Greg McBride.
Some credit unions also offer free checking which most banks today do not provide. Moreover, overdraft charges are cheaper on the average among credit unions. In addition, out of network ATM transactions are charged about 99 cents in credit unions whereas banks charge $1.41.
Aside from these benefits, a lot of credit unions belong to a network that allows customers to transact with other credit unions and withdraw funds from different ATMs all over the country.
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In terms of interest rates, credit union offer better rates. For example, a one year certificate of deposit is on the average paid at 0.7% whereas banks only pay 0.42%. For credit cards and loans, credit union rates are also much better with an average of 4.67% interest for vehicle loans compared to 5.47% charged by banks. Home equity lines of credit are at 4.16% in credit unions and 5.38% in banks.
A lot of people are also qualified to join credit unions. You can participate in a credit union that is affiliated with your employer or those that accept employees coming from different companies. You also have an option to join community credit unions which are open to people you work, live and go to school with in a specific area. Colleges and religious groups also have their own credit unions that you may be able to join.
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Tagged with: ATM • Automated teller machine • bank • credit card • Credit union • loan • Online banking • Transactional account
Filed under: interest rates • News • Personal Finance
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