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  • Credit Unions or Banks?

    My wife and I want to open up a savings account. I thought about WaWu, but also thought about a Credit Union. Does anyone have any thoughts as to which is better? My understanding, credit unions offer better rates. But what would the drawbacks be?

  • #2
    Well since I work for a Credit Union I'm a little bias. Usually the biggest drawback on a Credit Union is locations, unlike B of A or Wachovia they don't have locations all over the place.

    Credit Unions come in two flavors, community chartered, which means anyone that lives, works, worships, basically just drives through the area they cover are eligible to be members. These will be the most "Bank" like and usually have multiple branches in the area they serve. The second type is sponsor company based which means you have to work for a company that is in the credit unions sponsorship charter or usually spouses, children, siblings of members are also eligible. This is the type of Credit Union I work for, we have one corporate location and service about 35,000 members mostly on the east coast from it. We are obviously big on the "virtual" branch idea and you can do just about anything on our website, including deposit checks and have them instantly available. This is why on average we pay about a 1% higher on all our accounts including CD's and have lower loan rates. Our overhead is much lower then a Bank or Credit Union with a bunch of branches.

    Credit Unions are federally insured and regulated just like banks, the difference being it is the NCUA vs the FDIC doing the regulation but 98% of it is the same.

    If you are someone who likes to always be able to just walk into a branch wherever you are at then a big bank like B of A is probably for you. If you do a lot of direct deposit and online banking or only go to basically one branch but care more about rates then a Credit Union is a nice fit.

    Here's a site to find Credit Unions in your area and also ones you are eligible for by affiliation. http://www.joinacu.org/index.cfm

    Is it May yet ?

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    • #3
      I would agree with the above. I am a member of a CU for all of those reasons. That said, I hate my CU. My first experience was a company CU and it was a wonderful experience. I no longer work for that company or live in that area, so I went to banks until CU's became available without such a link as employment etc. Then I joined the closest CU. They are a pain in the rear. They act more like a bank than a CU in my opinion. There is almost no personal service. Not that you can get that in a bank, but I did expect more.

      For instance. I set up my car payment on a bi weekly draft because I had automatic deposit and was paid bi weekly. Then when I got sick, my check came from my disability insurance and wasn't automatic deposit. I went one Friday to get my weekend mad money out of the ATM and it wouldn't let me get even $10 although I had a balance of nearly $1000 at the time. Fortunately, they were open so I went inside. The problem? Since my check wasn't being deposited automatically, they didn't draft for my car payment. I can see that, but WHY in the hell didn't they pick up the phone and CALL me. There was plenty of money in the account to pay it. Damn. Their response: We don't do that. Well what in the hell do they do? That's just one example of the lousy customer service they offer. But banks are no better unless you get a small one and there are almost none of them left.
      Some people will do nearly anything in order to be able to not do anything.

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      • #4
        If your reason for a savings account is to establish a relationship with a financial institution for future borrowing, either a bank or a CU will suffice. I haven't checked lately, but if your savings is to earn a return you night be better off to establish a money market account with a discount brokerage firm. Their rates are usually higher than bank savings account rates, and they are not risky.
        All rides are bought. But occasionally the currency is talent.

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        • #5
          It's so funny you brought this up, because I just got an email from my credit union outlining the differences between banks and credit unions. Unfortunately, I deleted it.

          Biggest difference:

          credit union = not-for-profit

          bank = for-profit
          No weather forecasts are ever guaranteed, even if confidence level is high. Even a 99% probability will miss 1% of the time. That's the best anybody can do when predicting highly complex events.

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          • #6
            Take my advice and don't ask Truth Detector.
            quote:
            "It is sad that open-wheel racing has become a buy a ride situation, but it is what it is."

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            • #7
              ...I used to have both Credit Union and Bank accounts. However awhile back I fired 5/3 and due in large part to them I really don't care for banks anymore. I am solely a credit union member now.
              ​a bad day at the race track beats a good day at work

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              • #8
                I couldn't be happier with my CU.
                A book fell on my head, and I only have my shelf to blame.

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                • #9
                  I have accounts with two credit unions and have found over the years I could get better loans more consistently than from banks. But the two credit unions I belong to vary from each other on rates. The CDs have always been better at the credit unions as well. I do bank at Wells Fargo because they have ATMs just about everywhere in Minnesota.
                  Davydd (Anglicized Welsh name for David...that's all)
                  Certified BPT Taster Pursuing Pork Tenderloin Sandwiches
                  Long lost Speedway Sparkplug thrashing about in the deep woods of Minnesota

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                  • #10
                    Originally posted by Ren Butler
                    It's so funny you brought this up, because I just got an email from my credit union outlining the differences between banks and credit unions. Unfortunately, I deleted it.

                    Biggest difference:

                    credit union = not-for-profit

                    bank = for-profit


                    If you think credit unions don't make a profit you are fooling yourself.

                    The real difference is that Uncle Sam takes 39% (or whatever the rate is nowadays) of the bank's profits and none of the CU's profits. This is fair to the company CUs but not the ones that are on every corner and making commercial loans, etc.
                    Center Grove Trojans
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                    • #11
                      Originally posted by indyracefan
                      ...I used to have both Credit Union and Bank accounts. However awhile back I fired 5/3 and due in large part to them I really don't care for banks anymore. I am solely a credit union member now.


                      If I was comparing a steaming pile of manure and 5/3 I would fire 5/3. You didn't give banks a chance.
                      Center Grove Trojans
                      2008 5A Football State Champs
                      2015 6A Football State Champs
                      2011 Track State Champs

                      Center Grove Jr. Trojans
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                      • #12
                        Originally posted by ventman
                        If your reason for a savings account is to establish a relationship with a financial institution for future borrowing, either a bank or a CU will suffice. I haven't checked lately, but if your savings is to earn a return you night be better off to establish a money market account with a discount brokerage firm. Their rates are usually higher than bank savings account rates, and they are not risky.


                        Are they backed by the full faith and credit of the United States Government?

                        Center Grove Trojans
                        2008 5A Football State Champs
                        2015 6A Football State Champs
                        2011 Track State Champs

                        Center Grove Jr. Trojans
                        2014, 2015 & 2017 IEFA State Champs

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                        • #13
                          Originally posted by Davydd
                          I have accounts with two credit unions and have found over the years I could get better loans more consistently than from banks. But the two credit unions I belong to vary from each other on rates. The CDs have always been better at the credit unions as well. I do bank at Wells Fargo because they have ATMs just about everywhere in Minnesota.


                          Any bank (or CU) worth it's salt is offering free ATM use world-wide. My bank reimburses me for every ATM charge I'm assessed.
                          Center Grove Trojans
                          2008 5A Football State Champs
                          2015 6A Football State Champs
                          2011 Track State Champs

                          Center Grove Jr. Trojans
                          2014, 2015 & 2017 IEFA State Champs

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                          • #14
                            Originally posted by nm
                            Take my advice and don't ask Truth Detector.

                            UNLESS YOU WANT THE TRUTH!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

                            Center Grove Trojans
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                            2015 6A Football State Champs
                            2011 Track State Champs

                            Center Grove Jr. Trojans
                            2014, 2015 & 2017 IEFA State Champs

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                            • #15
                              The little company I work for has an employee credit union. Non-profit, it is staffed by 9 volunteers. Has very limited deposit account choices - actually just 1, a simple passbook account that last quarter paid 5%. Not bad, and minimum account balance is only $5. Use a bank for our checking, but use the CU for this simple savings account.

                              Likewise they are too small to offer mortgages, but have very favorable rates for new/used car, boat, motorcycle loans. Generally about 1-1.5% less than local banks but can't compete with new car dealers' 0% financing. Also a very simple matter and favorable rates for a loan secured by your savings account (up to $25,000), or can get up to $5,000 unsecured loan at a rate less than half that of my credit card.
                              "Had every Athenian citizen been a Socrates, every Athenian assembly would still have been a mob." - Federalist 55
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