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Are Banks More Accessible than Credit Unions?
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Ian D.
Certified Credit Union Financial Counselor
Posted June 26, 2019
It’s a common myth to assume that big banks make your accounts more accessible than credit unions. People assume this because they hear that credit unions are community based, but big banks tend to have locations across the country and sometimes internationally. Although credit unions often target specific communities with branch locations and community development efforts, their reach extends far beyond the brick and mortar. Let’s walk through some examples of how credit unions compare to banks.
What is a credit union?
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In essence, the major differences between credit unions and banks lie with the purpose and structure of each organization. Credit unions are not-for-profit businesses, meaning they are driven by a community reinvestment mission. As such, profits earned must be reinvested to benefit members and the communities in which they operate. This can include developing enhanced products and services, having lower loan interest rates, higher earnings on savings accounts, donations to the community, volunteering, financial education, and more. Accountholders are referred to as members and they have a vote when it comes time to elect the board of directors.
What is a bank?
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Banks are for-profit businesses, meaning their primary purpose is to make money. Accountholders are referred to as customers and they have no say in the business operations of the company. Banks generally have a goal to sell financial products that will earn them money in the form of fees and higher interest rates. Many banks are publicly held companies, meaning they sell shares of ownership on the stock market and the shareholders are the ones with a say about what the company does. Additionally, the primary purpose of such banks is to earn profits for their shareholders. Shareholders don’t even have to be customers of a bank they own stock in. Learn more about shareholders at https://www.investopedia.com/terms/s/shareholder.asp.
Branch and ATM locations
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Big banks tend to build lots of locations because they operate for-profit. This means that they open branches similar to how a retail company opens stores. Their goal is to be highly visible and recognizable by saturating communities with locations. Credit unions tend to be highly visible within their communities of origin, but they also make themselves accessible through cooperative networks that grant branch and ATM access nationwide in partnership with other credit unions. One example of such a network is the CO-OP network in which members of any participating credit union can access their accounts at over 5,600 shared branches nationwide and have access to nearly 30,000 surcharge-free ATMs. That is more ATMs than most banks own, including the big ones.
Online and mobile banking
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With the advent of online and mobile banking, it’s now easier than ever for people to access their accounts remotely. This includes checking account balances, transferring money between accounts, mobile check deposits, bill payment, applying for and receiving loans, and more. Many credit unions have members spread across the country and, in some cases, the world. This easy access can make physical locations less important and allows your account to follow you wherever you go. This makes many credit unions highly competitive with banks for account access, despite having less physical branch locations.
Capabilities and resources
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It’s also a common misconception that, because many banks are large, they must offer more products and services and have better technology. While some smaller credit unions and banks may have limited resources to provide services, not all financial institutions are the same. Many credit unions offer expanded products and services that also have far fewer fees to use them than banks! These services can include a sleek mobile app, expanded call center and online support hours, on-the-spot card printing, contactless card and card-lock technology, and more. Be sure to ask about available features if you’re unsure. People tend to assume a product isn’t available, even if they just haven’t heard about it.
 
Sources:
https://co-opcreditunions.org/locator/
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