Whether you are a business owner seeking a small business loan or a student with a recently-disbursed net check, a number of financial organizations, from national and local banks to credit unions, can meet your banking needs.
With all the available financial organizations, it can be tough to choose between patronizing a bank or credit union. This is especially true now that anyone can become a member of his or her local credit union.
It is nearly impossible to pinpoint any differences in the type of services and products offered by both banks and credit unions. Loans, mortgages, savings and checking accounts are just a few of the many products and services that are synonymous to both financial organizations.
However, features such as checking accounts with no minimum balance, no transaction fees and daily compounded interest can vary from one financial organization to another.
Credit unions differ from banks in that credit unions are not for profit and exempt from federal income tax. Also, the National Credit Union Administration governs credit unions, while the Federal Deposit Insurance Corporation regulates banks.
According to Leslie Smith, director of marketing services for Envision Credit Union, those who join credit unions are considered members as well as shareholders. Being a shareholder makes it easier to be approved for a loan, and gives members the opportunity to cast their vote in credit union elections.
“Our philosophy is people helping people,” Smith said. “With banks it’s more about them wanting to better their bottom line, but with us, it’s about building a relationship with our members to give them exactly what they need to improve financially.”In addition to using widespread marketing campaigns, banks have also begun to improve their customer service departments in order to continue to build market share.
“At our bank, we treat all our clients the same. We try to keep that hometown feel, but we can offer all the same services to our clients that national banks can offer,” said Florida A&M University alumna Yvette Holmes, advertising manager for Capital City Bank.
Aside from any products banks or credit unions may offer, convenience also play s a large role.
“When you’re with a credit union, you are restricted to which ATMs you can use because you may have to pay a fee, but we’ve got five locations, so it’s more convenient for students,” said Chiquita McKnight, assistant vice president and branch manager for Hancock Bank. Holmes said Capital City Bank has made its mark on FAMU by providing ATMs throughout campus. Also, Rattler cards can double as debit cards for students who have an account with the bank.When it comes to choosing the right organization for your banking needs, it is important to be aware of certain financial aspects such as how much interest is placed on loans, and any possible future perks.
“I heard it was easier to work with a credit union than a bank because you get better interest rates. I’ll open a savings account now and in a few years when I’m looking to get a student loan or mortgage, it’ll be easier,” said Brandi Twiggs, 23, a graduate business student from Philadelphia.
According to Smith, banks tend to attach more interest on loans because of the nature of their business.
Additionally, monthly fees can become a deciding factor in making your decision.
“I prefer to use a credit union because with a bank you can overdraw, but with a credit union you can’t,” said Kahla King, 20, a junior accounting student from West Palm Beach.
“As a student I spend a lot, so if I was to ever get an account with a bank, I’d have a lot of overcharge fees,” King said.Ultimately, making a decision between a credit union and a bank depends on the type of convenience and customer service a person is seeking, the type of future business he or she may be doing with that financial institution and the fees associated with whichever one you choose.