October 14, 2021

The Credit Union Difference: Why Choose a Credit Union Over a Bank

Have you ever wondered what is the difference between a credit union and a bank? Both financial institutions provide an array of financial services from everyday banking to loans, but the main difference between them is in the ownership.

Banks have customers. Credit unions have members.

What difference does that make? If you ask us, a big one. We like to call it The Credit Union Difference.

Credit unions are…

Not-for-profit and owned by members
A bank is a for-profit financial institution owned by stockholders. You already know how stocks work, but as a recap, companies have a vested interest in turning a profit for their stockholders — even when that’s accomplished at the expense of the customers through higher fees and higher interest rates on loans. In contrast, a credit union is owned by its members. We have an interest in doing what’s best for the membership as a whole and returning those benefits to their members in the form of better rates on savings and loans.

Focused on relationships and service
At a credit union, the team members want to get to know you — not just your name but also your financial needs and goals. We’re here to learn about where you are and help you get where you want to go. When you call us, you’ll talk to a real person who lives in the communities we serve. We like to think we’re more human, less robotic than the many faceless banks out there.

Involved in the community
From involvement in charities and other community organizations to financial literacy initiatives, credit unions are all about giving back to our members and the communities we serve. Find out more about what we’ve been up to lately in our Community News. At Grow, we care about your financial wellbeing and want to help you grow real wealth in your life, so we make financial literacy education a priority. We share educational content regularly on our Education page and through our social media. Follow us on Instagram or Facebook to stay in the know.

Insured by NCUA
Your money is safe with a federally insured credit union. While the Federal Deposit Insurance Corporation (FDIC) handles the banks, the National Credit Union Administration (NCUA) insures share accounts in federally insured credit unions for $250,000 per qualifying account. Find out more about how your funds are insured.

Saving our members money
The Credit Union Difference isn’t just about relationships, though member relationships are a top priority. It’s also about saving you money. How? Lower fees and better rates. The Credit Union National Association (CUNA) estimates that credit unions provided direct financial benefits during the twelve months ending March 2021 equivalent to $115 per member or $242 per member household, compared to banks.^* How’d they calculate this amount? The estimated total benefits of credit union membership were calculated by accounting for differences in average credit union and bank pricing, including savings account yields, loan interest rates and fees. For example, the average 60-month new car loan rate was an average of 1.56% lower at credit unions compared to banks, and the average mortgage closing costs were a whopping $210 lower. Talk about money that adds up!

Serving people, not profit

So, why choose a credit union over a bank? As a not-for-profit financial cooperative, we work for the benefit of our members, not the pocketbooks of corporate stockholders. Every day, our members are at the heart of what we do, and member service is what we’re all about. At Grow, our mission is to serve people, not profit.