As WWFCU continues to celebrate its 70th anniversary and we reflect over the years, one question that we always seem to hear is “what is the difference between a credit union versus a bank? Why should I want to do business with a credit union over a bank?” If you yourself have ever wondered this question, the Financial Gurus have your answer! Continue reading to find out what makes choosing a credit union for your financial needs the superior choice.
Banks = For Profit / Credit Unions = Not-for-Profit
One of the biggest differences between banks and credit unions is that banks are FOR profit, and credit unions are NON-profit. What does this mean exactly? Banks being for profit means that the income they make from their services, fees, etc. is paid to their shareholders. The credit union ideology is a little different. One of our core principles is being member driven, meaning all profits a credit union makes are reinvested back into the credit union, which also supports our “people helping people” philosophy. No Wall Street investors will gain from any profits a credit union makes. You the member will gain from these profits in the form of competitive interest rates, higher dividend rates, and lower fees just to name a few.
Credit unions were designed with the communities that they serve in mind. Many offer financial education and outreach, small business needs, and some may even have in school or store locations to better serve the community. WWFCU has offered several financial wellness classes at the Westland library and are planning more in the future. The well-being of our members and the community that we serve is our highest priority. We are always brainstorming to produce innovative ideas to help better serve our members.
Ownership
Did you know that credit unions are also member owned? Each of our members “owns” a share of the credit union, and with that you get a vote! Our board of directors consists of volunteers elected by our membership. Their role is to provide leadership and oversight to the credit union. Each year, members are invited to our annual meeting where they can join discussions and voice their opinions. Conversely, banks are governed by a paid board of directors and its shareholders. So, what is in the best interest for the account holders (members) is often overlooked for what is best for the shareholders. Their goal is to maximize profits to increase their wealth.
While WWFCU may have just one brick and mortar location, did you know you have a whole network of credit unions to access your account? WWFCU, as well as many other credit unions, is part of the Co-Op Shared Branch Network. This means we participate with other credit unions out of town and even out of state to allow you to perform transactions while you are on vacation, on a work trip, visiting family, or everything else in between. Utilize the shared branch locator on our website to find participating credit unions and ATMs across the country! With banks, if an emergency arises you face the burden of trying to find a location where you are traveling, and some banks are only found within certain regions in the country. The Co-Op Shared Branch Network gives you more flexibility with accessible options and convenience over a traditional bank.
Better Interest Rates with Credit Unions
Remember earlier when we mentioned one of the benefits of credit unions being not-for-profit allows us to offer our members lower interest rates? This one benefit alone could potentially save you hundreds or even thousands of dollars! The interest rate on loans through the credit union can average more than 2% lower than bank rates! Just think about the amount of interest that would save you over the term of your loan. Now more than ever, keeping your hard-earned dollars in your pocket is crucial. Check out some of our earlier blogs to learn about the importance of interest rates and the benefits of boosting your credit.
While there are many other differences between banks and credit unions, we hope these factors will reinforce your decision to become a member of WWFCU. You will also have peace of mind knowing that your funds are federally insured up to $250,000 through the National Credit Union Administration (NCUA). Credit unions were built to serve their members and communities with outstanding and personal customer service. We want to thank all our members, past, present, and future, for allowing us to serve your financial needs over the past 70 years and helping you to achieve your goals. Here’s to 70 more!
Sincerely,
Your Financial Gurus