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Whether you’re applying for a loan or opening a savings account, you want to choose an institution that values your money. While a bank is the more traditional source of financial services, a local credit union could be a more appropriate place to handle your banking needs. Here is a brief description of what a credit union is and how it differs from a bank to help you decide where to put your money. 

A Guide to Credit Unions & Banks

What Is a Credit Union?

It is a financial cooperative that is owned by its local members. It’s a smaller, not-for-profit institution with the purpose of providing affordable financial services, including checking and savings accounts, to the people.

What Are the Main Differences Between the Two?

credit unionThe members of a local credit union have a vote when selecting the board members and can also run for the board themselves. On the other hand, stockholders own banks, which means customers do not have control over how the bank is run. 

Since credit unions are not-for-profit and are owned by the individuals who use their services, they tend to offer more competitive lending rates, decreased fees, and higher savings rates than banks. However, banks don’t share information with one another. Because they’re for-profit institutions, their earnings are only paid to stockholders.

In terms of services, a credit union focuses more on consumer loans, savings, and any other services needed by the member. A bank is dedicated more to commercial loans and accounts that result in the highest amount of income.

What Are the Advantages of Going to a Credit Union?

You’ll likely receive better loan rates and lower fees from a credit union. They are also historically stable institutions. They’ve never been bailed out using taxpayer money, even during the Savings & Loan bailout of the 1980s and the downturn of 2008.

 

Are you searching for a local credit union in your area? North Jersey Federal Credit Union in Totowa, NJ, has been getting their members the lowest rates for loans, term share certificates, and other services for 82 years. They provide a variety of personal and business financial services, including mortgages and savings accounts. Their goal is to build a strong, trusting relationship so you get peace of mind with your finances. Call (973) 785-9200 or visit their website to learn more about how their services will improve your financial stability.

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