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What are the benefits of a credit union?

Credit Union Vs. Bank
July 03, 2019

By Katie Pins

Where you bank matters. You invest time and hard work into every dollar you earn. You don’t want to waste your money on fees or high loan rates, you want to see it protected and growing. Credit unions understand these needs better than big banks. They cater to their members with lower fees, better rates, and good customer service. Credit unions also embrace online banking in full force while remaining secure. Let’s take a closer look at the benefits of a credit union:

1. Credit unions don’t have customers, they have members. And, members matter.

The most obvious difference between a bank and a credit union is that credit unions answer to their members. They don’t answer to stockholders. Your membership represents a share of ownership. Credit unions take pride in serving their members’ best interests.

Because their members come first, credit unions focus on empowering members through digital and customer service. When they’re efficient, credit unions also can pass their savings onto their members. For example, Alliant operates in an economical way by focusing on digital banking channels and investing in digital technology improvements.

2. Banking with credit unions typically means lower fees.

Banking and investment fees irritate me. I’m sure you feel the same way. In college, a popular big bank charged me a fee for having less than $1,000 in my savings account. The fee was upsetting, so, I closed my account and went somewhere else. If you also want to avoid high fees, try looking at credit unions because credit unions are not-for-profit organizations. Fees are typically lower and there are fewer of them. Compare rates and fees, especially on loans such as mortgages or car loans.

3. Another benefit of a credit union: it may have better rates.

Everyone wants their money to earn more money. Credit unions help you achieve this because of their great rates. Every dollar you invest in a credit union is reinvested in you. Therefore, credit unions have higher deposit rates and lower loan rates.

For example, the rate on Alliant’s High-Rate Savings Account is 8x higher than the bank industry average71. (Click here to learn more about Alliant's High-Rate Savings APY.) Checking accounts and certificates do well too. Alliant’s checking account APY is 4.2x the national average​69. (Click here to learn more about Alliant's Checking APY.)

When it comes to interest rates on loans, you will find competitive pricing. Again, compare rates and you may be pleasantly surprised. Credit unions offer student, car, home equity, mortgage, personal, and business loans.

4. Mobile banking and ATMs bring banking to you.

Alliant credit union is no longer restricted to a local region. It is available nationwide, thanks to digital banking. Credit unions, in general, have fewer branches than traditional banks. However, that is less of an issue today. As banking becomes more mobile, the need to use a physical teller is diminishing. You may need to use an ATM every so often, so sometimes credit unions partner with other credit unions to create a network of ATMs. (Alliant also offers ATM fee rebates, up to $20 per month for members with a checking account.) Banking is no longer restricted to a building. It is with you everywhere you go.

5. Credit unions are active in their communities.

Again, credit unions are member-oriented. Members come first, which means members’ communities also come first. For example, the Alliant Credit Union Foundation sponsors educational programs to teach financial literacy. The Foundation also invests in local communities and provides grants to a variety of charities.  

In Short

When you join a credit union, you aren’t just an account number. You’re joining a not-for-profit financial cooperative where all of the members are owners. Alliant Credit Union benefits include higher savings rates, lower loan rates, and convenient digital services.

Learn even more about the differences between banks vs. credit unions.

Katie Pins is a marketer fascinated with finance. Whether the topic is about the psychology of money, investment strategies or simply how to spend better, Katie enjoys diving in and sharing all the details with family, friends and Money Mentor readers. Money management needs to be simplified and Katie hopes she accomplishes that for our readers. The saying goes, "Knowledge is Power", and she hopes you feel empowered after reading Money Mentor.

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