You’ve heard the names tossed around on TV, social media and probably a postcard or two you’ve gotten in your mailbox. And though you may feel like you’ve got a pretty good handle on what a “bank” is, what makes it different from a “credit union” and why should choose the latter?
Here are just a few of the key differences between the two types of financial institutions.
One of the primary ways that credit unions differ from banks is that they are member-owned. That means that the members get some say in the direction of the organization, whereas a bank is beholden to investors, stockholders, corporate leadership and the like. In fact, our board of directors are volunteers—helping to ensure that your finances are in the hands of individuals that prioritizes person over profit! In a credit union setting, members get frequent opportunities to voice their opinions, and the atmosphere is one of community collaboration versus corporate mandates.
“I came to the credit union feeling like elsewhere I had been given a loan with no options. I walked out of Sioux Falls Fed educated on rates, warranties and even credit cards. I feel like I made better choices for my lifestyle today. I feel in control of my options and my money.”
— New Member Testimonial
One thing you may think of when you hear the word “bank” is the image of a “fat cat” raking in the profits from accountholders. While this is probably an exaggeration, one thing you can be sure to avoid when it comes to banking with a credit union is an environment of profit-focus. In fact, credit unions by their very nature are not-for-profit. We put member ahead of bottom line, every time.
As a direct effect of the above factoid, members also financially benefit from credit unions’ not-for-profit status. When the credit union does well, the members do well—that comes in the form of dividends credited back to members’ accounts. The best part? You don’t have to do anything to earn dividends! No extra work necessary.
Getting into rate wars and comparing bank to bank, there is often a pretty slim margin, locally, on what’s being offered. But thanks to credit unions’ largely localized business models, they are often able to offer competitively lower rates than national competitors. This goes for auto loans, personal loans and student loans—when rate-hunting, always check out a credit union first.
“I came into a Sioux Falls Fed branch to check on refinancing my two vehicles. At first, I didn’t even think about comparing my camper’s current rates, but we did some checking and realized I was on a 180-month term with a fixed rate of 8.25% at a bank. Not only was I able to save money on my two vehicles, but Sioux Falls Fed also saved me a whopping $22,489 in interest on my existing camper loan with a lower rate, shorter term, all while keeping my payments the same. I truly felt like they had my back as a member. Thank you so much!.”
— Member Testimonial
Curious about what being a member truly feels like? Talk to Sioux Falls Fed about how we make members feel like part of the Sioux Falls Fed family.