If you bank at one of the large or chain banks, you have probably noticed several changes to your account recently. Many banks have discontinued key features and are now charging customers to keep their accounts open. As banks struggle to maintain profitability in a wavering economy the customers are taking the hit.
Many of us are working diligently to stay out of debt and keep positive balances in our accounts, which is why the news of bank fees for not meeting large minimum balance requirements is not met with silence. The good news is that credit unions offer great features for their customers and have yet to follow in the steps of the big banks.
Why A Credit Union?
Most people have stayed away from credit unions mostly because they are misunderstood. People assume that they must be a government employee or part of a employee union in order to bank at a credit union. In fact, anyone can join a local community credit union.
Credit unions offer minimal account fees and have higher reported customer service ratings. One of the main differences between a credit union and a bank is how they are managed. A bank is run by a board of officials, whose job is to maximize profitability for the bank. After all, more profitability means more money in their wallets.
A credit union is also run by a board of directors, but, unlike a bank, the credit union’s board of directors are volunteers and not paid employees. Less salaried employees means more money back into the customer base and happier customers. Although local credit unions have far less locations than a bank, most are part of a co-op that allows for the use of any credit union worldwide that is a participating member.
Is My Money Safe?
If you bank at a traditional bank you know your money is secure in the event of theft or fire because they are backed by the FDIC, or Federal Deposit Insurance Corporation. The FDIC insures and guarantees the money held in banks. A credit union is not backed by the FDIC, but is backed by the NCUA, or National Credit Union Association. The FDIC and NCUA serve the same function and both are independent agencies.