Deciding where to put your hard earned money is kind of a big deal. Do you go with a big bank with a well-known name? A place that gives you the convenience of being able to access your account no matter where you are in the world? Or do you go with a credit union? A place rooted within your community? There are so many differences between banks and credit unions, as well as many misconceptions as to what exactly your local credit union can offer you. I thought we would take a little time to debunk those myths and show you why HarborLight Credit Union, as well as any other credit union, might just be the place for you.
Myth #1: Banks and credit unions are basically the same thing.
The only similarity between us and a bank is that we are financial institutions. We both exist as places that deals with monetary transactions such as deposits, withdrawals, loans and investments. I’m sure there are other similarities but that is basically it.
So what’s different?
- Banks usually call their account holders “customers.”
- A bank is owned by stockholders who purchase stock as an investment.
- Sitting on the board of directors is a paid position.
- Earnings are paid to the stockholders.
- Anyone can join a bank.
A Credit Union
- Instead of customers; credit unions have “members.”
- A credit union is owned by the members and each member has an equal say on decisions.
- Board members are usually unpaid volunteers that are elected by other members.
- Earnings are paid back to the members usually in the form of higher savings rates and lower loan rates.
- Membership is reliant to meeting some sort of membership criteria
I could go on and on about the differences but that’s it in a nutshell. I’m not trying to write a novel here.
Myth #2: It is difficult to qualify for membership with a credit union.
This may have been somewhat true in the past, but in recent years, many credit unions have steered away from this exclusivity and instead have become community based credit unions. This means that basically anyone who lives, works, worships or attends school within a specific geographical region would qualify for membership. Before we were HarborLight Credit Union, we were Howmet Employees Credit Union. When we dropped “Employees” in our name, we opened ourselves up to more of the community.
Myth #3: You have limited access to your account.
Another one of the biggest myths is that your account with your bank is much more accessible from anywhere in the world than your account with a credit union would be. Did you know that most credit unions participate in some type of cooperative with other credit unions to give you access to your accounts and provide you with surcharge free ATMs? Basically, what this boils down to is that I can have my account here at HarborLight Credit Union, move to Phoenix, Arizona and have access to my account at over 50 different credit unions just in that city alone. This is because we participate in the Co-op Shared Branching Network. With over 3,500 different credit unions working together, this gives you over 5,000 branches and around 30,000 surcharge free ATMs nationwide that you can use to access your account here. For more information about shared branching visit https://co-opcreditunions.org/.
Myth #4: Your account and your money isn’t as secure at a credit union as it is at a bank
A bank insures their account holders up to $250,000 through the Federal Deposit Insurance Corporation. (FDIC) Credit unions are also insured up to $250,000 as well, just through a different federal organization, the National Credit Union Administration. (NCUA)
In my humble opinion, the choice is pretty simple. I’ve only ever had an account with a credit union, but I wouldn’t dream of taking my money anywhere else.
(I’m not getting paid to say that either.)