Comments on: Banks vs. Credit Unions: Which is Better?

By: Kristy

Kristy — Wed, 15 Apr 2009 05:00:15 +0000

@ Ned – I’m not disagreeing with you, but the fact remains that even at your small community bank, you’re still for-profit. Therefore, fees are a major source of income for your bank. You may not abuse it to the extent that the larger banks do – case in point, take a look at Bank of America’s new fee structure – but fee income is still a large part of the equation for you. I do happen to agree that community banks are better than big banks any day, though!

By: Ned

Ned — Wed, 15 Apr 2009 01:13:43 +0000

Now don’t throw all the banks in one big fee encrusted greedy box. Having worked for primarily small, community based banks I can say that there is a big difference between the small and large banks. Small community banks are typically owned by members of the community (local shareholders and employees) and are founded by people that have invested their lives and their money.
Their fee structure is comparatively lower than most. In most cases, customers know their branch management by name and decisions about fees and loans are still made by people and not completely dictated by some company policy. At my bank, a lot of the customers know the CEO by name and have his phone number. Loan decisions are made on a case by case basis in front of a committee. Not a machine with a scoring matrix. When we invest the funds on deposit wisely, we can afford to give the excess back to our customers and our employees through higher deposit rates, lower loan rates and better salaries.

Now, I am not trying to sell banks to credit unions or vice versa. Just making a distinction. I have absolutely nothing against credit unions and (shock) I actually belong to one and love it. I have found that credit unions are similar in many ways to small banks. Because they generally strive for the same things. Better service, convenience, luring customers away from the big fee banks and growing their customer bases.

In summary, if you want to go where everyone knows your name, speak with someone that will WANT to HELP you and don’t want to get killed with fees, go to a credit union or a community bank.

By: Bryan @ Frugal Logic

Bryan @ Frugal Logic — Mon, 19 Jan 2009 10:25:42 +0000

My Credit Union is so much better than the bank that I used to have my accounts with.

It is so nice ringing them up and having the person that answers the call be able to handle pretty much any query I have. With my old bank I used to get bounced around different departments before I could get what I wanted.

The Credit Union fees are also amazingly low. Big banks try to charge fees for anything they can think of.

Our mortgage rate was also significantly lower than any of the big banks when we applied for our loan (I haven’t actually compared recently though).

I also feel they will always try and do the right thing by me, rather than trying to maximize their profits and that’s a nice feeling to have.

By: Kristy

Kristy — Tue, 30 Sep 2008 02:12:17 +0000

I’m not trying to sell anything, I’m giving my opinion based on the fact that I’ve worked at both banks and credit unions. I think credit unions are better. I agree both have their faults and service is dependent on the employee, but typically, walking into a credit union you do get better service because there is less pressure to sell than there is in the bigger banks. There it’s all about numbers. However, I also said that the bigger banks serve their purpose too.

But, here’s another way to look at it. The NCUA – which is who insures credit unions – isn’t anywhere near insolvent. In fact, there aren’t too many credit unions that shut down for poor choices, or are seized and control giving to another credit union. The FDIC is going to have to start borrowing from the Fed in order to cover the deposit requirements it needs to meet. Fortunately, they were able to get Chase and Citigroup to take over WaMu and Wachovia respectively, but the point is, banks are far from being done with their failures. There will be more to come. So, in my professional opinion, credit unions are better. Take it or leave it.

By: nathan

nathan — Mon, 29 Sep 2008 21:57:52 +0000

If credit unions were so much better then everybody would be using them instead of banks. Fact is their not. That would be the answer to which you should use. Whoever said credit unions offer better service is just a salesman making a sales pitch and I’m certainly not dumb enough to buy what you’re selling. The service depends on the employee, not the branch.

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By: Kristy

Kristy — Sun, 20 Apr 2008 05:31:18 +0000

@Andrew – I’m sorry to hear that you had trouble with the credit unions you’ve dealt with, but it could be that you were working with smaller credit unions. Convenience is certainly a huge factor when it comes to banking; however, credit unions are making things more convenient for members. The credit union I work for began as the IBM employees credit union but has now opened their membership base. But, being a techie credit union means we keep up with a lot of the conveniences of online banking like bill pay, ACH transfers, etc. We offer a free software that works like Quicken or MS Money and mobile banking. We even have Instant Deposit Online – one of only three financial institutions in the country to offer this product. So, progress is in motion.

@JC – Mutual savings banks are few and far between, but you’re right, they’re pretty much the best of both worlds!

By: jc

jc — Fri, 18 Apr 2008 05:19:31 +0000

You completely forgot to mention a mutual savings bank. The best of both worlds. Owned by the customers but offers all of the extra benefits of a bank in addition to things such as processing savings bonds.

I’ve worked for two banks as well. One a shareholder bank and now a mutual savings bank(very few and far between to find). I prefer where I’m at right now. Oh, and I know a very large percentage of my customers by a first name basis.