Five Ways Credit Unions are Different From Banks
Credit unions like Greater Nevada Credit Union (GNCU) offer a distinct approach to providing financial services and community engagement. In honor of International Credit Union Day – Thursday, Oct. 20, 2022 – the team at GNCU is sharing how and when you can best use the benefits of a credit union. Discover what sets credit unions and banks apart and how to leverage them in conjunction with other financial institutions and solutions.
1: Lower fees, lower stress
Credit unions usually provide lower service fees when compared to banks. Having a low or no-fee checking account can help reduce stress – especially as inflation raises prices on everyday purchases. GNCU even offers a cash-back checking account.
2: Higher earnings potential for savings accounts
A high-yield savings account will earn you more money in the long-run. Credit unions provide higher interest rates on savings accounts than most banks. This is due to credit unions being not-for-profit institutions and sharing their profits with members. Every credit union member is a partial-owner and receives access to this advantage.
You may have a checking account with a bank but find that savings accounts at credit unions make more sense. Linking a checking account at a bank and a savings account at a credit union is easy with today’s digital banking systems and belonging to both a bank and a credit union is not only possible, but also a pragmatic approach that lets you have the best of what each has to offer.
3: Credit unions build credit
Credit unions have a history of engaging in credit lending to underserved communities. According to research from the Urban Institute, young adults from Hispanic and Black communities tend to have lower average credit scores. Most recently, the National Credit Union Administration awarded $1.5 million in grants to help 90 low income credit unions expand outreach and services to underserved communities.
GNCU continues this legacy and is certified as a Community Development Financial Institution (CDFI). This means it has been recognized for offering critical financial services that are often unavailable from conventional financial institutions. GNCU expands credit access through innovative ways such as auto loans to first-time buyers and for those who need help rebuilding their credit. Helping build and rebuild credit is how a credit union can be a part of your financial team.
4: Lower interest rates, more flexible terms on car and home loans
It’s not uncommon for people to have a checking account with a bank and acquire a car and/or home loan through a credit union. Credit unions usually grant lower interest rates on loans. According to Investopedia, banks usually can’t compete with credit unions with respect to loan rates.
5: Credit unions invest in your community
Credit unions are invested in making a long-term positive impact by bringing vital services to communities. From leading food drives, donating money to youth experiencing homelessness and teaching students financial literacy, credit unions live, breathe and work locally. Last month, GNCU donated $10,000 to help Reno Food Systems, a nonprofit that alleviates food insecurity in Reno-Sparks.
Making a credit union a part of your financial tool set ensures your community wins together. Credit unions allow members to invest both directly and indirectly in their local communities. The local charities that GNCU supports give back and make northern Nevada a better place. Joining a credit union is a simple and practical method to give back locally.
What is better, a credit union or a bank? The choice between using a bank or credit union does not have to be exclusive. Instead, you can leverage their strengths to make your financial game plan stronger. Adding a credit union to your financial team can empower you to achieve your financial goals while giving back to your community.