When most people want to save or invest their money, the first place they approach is a bank. Credit unions are becoming an increasingly popular alternative, and there are many reasons why credit unions might be better for both individual and business finances over heading straight to the bank.
What's the difference between a credit union and banks in Omaha?
Here are a few of the main differences between credit unions and banks explained.
Banks Run on Profit
Banks run on pure profit: Banks have investor owners, and banks are run to make money for those investor owners. The more customers that have investments and accounts with them, the more profits they can earn. This means that profit can often be the motivation over the needs of the consumer when you're doing business with a bank.
Credit unions are non-profit ventures owned by their customers (called members). Instead of being driven only by how much money they can make, the focus of credit unions are often far more customer-centric.
Banks Are More Affected by Market Variables
Banks are more affected by market variables: In the financial crash of 2008, many banks were among the hardest hit because their quest for profits caused them to make riskier investments. Many required a government bailout. Most credit unions weren't nearly as affected during this crash; in fact, many credit unions saw tremendous growth after the crash as more and more consumers moved away from banks and to credit unions.
Banks Play in Other Markets
Banks can be viewed as a tree that extends with several branches, and these branches extend into other financial avenues like the investment trading, foreign exchange and large-scale business investments. Where do banks get the money for this? Their customers, and sometimes customer accounts are merely the means to fund the “other branches”. With credit unions, customer accounts is what they do; it’s never the means to an end. Banking with credit unions allows you to know your business is always their priority.
Credit Unions Offer Local Control
In most credit unions, the decisions are made locally by a Board and Managers who are also members of the credit union. Choices about products and services, branch locations and technology, and even interest rates and fees are made by people who like you who also bank with the credit union. Because decision making in a banks is about profit, larger banks are often buying smaller, community banks, and decisions that affect you and your account can be made halfway across the country.
Credit unions keep control in the hands of people who bank with the credit union: It's one more reason why they can be superior to banks (and why your money goes farther with a credit union in the long run). Contact us today if you are looking to get the best rates on auto or mortgage loans.