You have many options when choosing your primary financial institution. Whether you are looking for a checking account to manage your household finances or a specialized financing plan tailored for your small business, there can be an overwhelming assortment of offerings. One of the best places to start is learning about the differences between credit unions and banks. When deciding whether to do business with a credit union, here’s a primary consideration:

Which financial institution will let me keep more of my money?

How does a credit union help you keep more of your money? Is does so in three ways:

1. Credit unions are not-for-profit financial cooperative enterprises

2. Credit unions generally offer better rates on loans, deposits and fees

3. Credit unions are member-owned

Not-for-profit:

“The Credit Union National Association (CUNA) estimates that Utah credit unions provided $114 million in direct financial benefits to the state’s 1.8 million members during the twelve months ending March 2014. These benefits are equivalent to $62 per member or $117 per member household. Financing a $25,000 new automobile for 60 months at a Utah credit union will save members an average $137 per year in interest expense compared to what they would pay at a banking institution in the state. Further, loyal members – those who use the credit union extensively – often receive total financial benefits that are much greater than the average.” (cuna.org)

Better Rates on Loans, Deposits, and Fees

Because credit unions are not-for-profit, they are better able to provide this financial benefit to their members through better rates on loans, deposits and fees. Just compare Utah credit unions and banks (all data from cuna.org):

Loan Products	Utah Credit Unions	Utah Banks
60 month new car (A paper)	2.50%	3.53%
48 month used car (A paper)	2.66%	3.68%
Unsecured loan (A paper)	8.98%	9.49%
5 year adj. rate 1st mortgage, 0 pts	3.00%	2.93%
15 year fixed rate 1st mortgage, 0 pts	3.45%	3.59%
30 year fixed rate 1st mortgage, 0 pts	4.27%	4.30%
Home equity / 2nd mtg, 80% LTV, 0 pts	4.10%	4.56%
Credit card – classic	11.76%	15.85%
Credit card – gold	10.64%	11.25%

Deposit Accounts	Utah Credit Unions	Utah Banks
Retirement (IRA) accounts	0.29%	0.22%
1 Year certificate $10,000 balance	0.43%	0.34%
Money market accounts	0.14%	0.10%
Share draft checking, $5,000 balance	0.35%	0.15%
Regular savings, $1,000 balance	0.15%	0.09%

Fee Structure	Utah Credit Unions	Utah Banks
Share draft checking, NSF fee	$ 27.20	$ 29.51
Credit Cards, late fee	$ 24.56	$ 34.18
Morgages, closing costs	$ 1,151.00	$ 1,361.00

Member Owned / Board of Directors

Among the most important distinctions of a credit union is that the company is owned by its members. Every member with a share (savings) account is a member/owner of the credit union. As the Credit Union National Association stated, “Credit unions are economic democracy. Each credit union member has equal ownership and one vote – regardless of how much money a member has on deposit. At a credit union, every customer is both a member and an owner.”

Imagine if your local grocery store was owned by the customers who shopped there. Would it be managed differently? Or, what if a toy shop was owned by the kids who shopped there? In that situation, there might not be a toy shop left at the end of the week…but the example drives home the point that a not-for-profit business, run by its members, has a different mind-set on how to do business.

Credit union members have the opportunity to elect the board of directors who provide strategic direction and oversight for the credit union. The board of directors has the stewardship to ensure the credit union is appropriately serving the membership. Is the credit union earning enough to keep the lights on and serve its members? Is risk managed appropriately to preserve the credit union for generations to come? Are members reaping the financial benefits that that belonging to credit union entails? Annual board elections give members a voice in saying how the credit union operates.

When it comes to choosing a financial institution, keeping more of your money is a huge consideration for most consumers and business owners. The unique nature of credit unions allows members to both save and earn money when compared to banks.