Since credit unions and banks offer most of the same products, it can be hard to determine which one is best for you. Let’s go over some common questions to help you decide between banks vs. credit unions. If you’re already a member, these might be some good items to discuss with your friends who still haven’t made the switch.
Full disclosure: We’re a little biased on this topic.
Do banks and credit unions offer the services I need to manage my everyday finances?
Yes. Most banks and credit unions offer checking accounts, savings accounts, debit cards, online banking, and mobile banking. They also have loan products like auto loans, credit cards, and home equity loans.
I know I can use a bank, but am I eligible to join a credit union?
Yes! Some credit unions are only open to people who work at a specific businesses, but most credit unions are actually community-chartered these days. That means that anyone who lives, works, goes to school, or regularly conducts business in a specific area can join the credit union.
(Tip: Diamond is community-chartered in Berks County and the Tri-County Region!)
Do I need a large minimum balance to open an account at a bank or a credit union?
That depends. Some banks require minimum balances to open savings or checking accounts. Most credit unions allow you to open a savings account with a minimal deposit (typically $5-$25) that acts as your share in the credit union—that’s your money and you get it back if you should ever close your account. And with credit unions, there is typically a checking account option that does not require a minimum balance.
(Tip: Diamond’s Checking Direct account only requires one direct deposit each month to avoid a monthly service fee!)
Which one offers more no-surcharge ATMs…banks or credit unions?
This answer might surprise you. Credit unions are typically part of large, no-surcharge ATM networks with locations across the country and even around the world. Many heavy travelers think it’s better to join a big bank because they will always be able to find an ATM, but with a credit union ATM network, you’ll actually have more ATMs to choose from!
(Tip: You can find a no-surcharge ATM near you with Diamond’s mobile app or search online.)
Where will I pay fewer/less fees, a bank or a credit union?
Generally credit unions have fewer account requirements and fees than banks, which have become notorious for hidden charges. The fees that credit unions do charge tend to be much lower dollar amounts than bank averages.
Who owns banks and credit unions?
Banks are owned by private investor shareholders. Credit unions are owned by their members. Everyone who opens an account becomes a shareholder, or member-owner, and all of the money credit unions make is used to keep the credit union running and is given back to members in the form of lower/fewer fees, lower rates, and better returns.
See our Banks vs. Credit Unions video for a more detailed explanation: