Consumers have a lot of options when it comes to choosing a financial institution to manage their money. From traditional banks, credit unions and even online banks, the list is long. Yet more and more consumers are deciding to use credit unions due to the many benefits that they offer over banks. Although your situation may be different from the average person, the main reason to choose a credit union over traditional banking is that they care about their clients. This is due to an unconventional business structure that allows credit union customers to play a more active role in the company. Therefore their clients trust them with their money.
The fundamental difference between banks and credit unions lies in their organization structure. While banks are either privately or publicly held businesses, credit unions are not-for-profit entities that are owned by the shareholders. These shareholders, also called members, are all of the individuals who have accounts at the bank. Thus, credit unions are designed to work for their members. They don’t have to worry about factors like stock shares or other financial numbers that banks use. Because the members of the union are also owners, they have more of a say in the day to day operations of the company. Members can attend meetings, vote for policy changes and even sit on the board of directors. All members of credit unions have an equal say in how it runs, regardless of how much money they have invested in it.
One way that this focus on members is exhibited is the cooperation between many credit unions to provide member convenience options. Many credit unions are linked together, so that members can use their ATMs without fees. Some even have service centers that provide a limited number of other financial transactions. Credit unions also offer loans that are considered to be too small for larger banks to consider, making them a good option for lower-income individuals and young families. If you are thinking about applying for a small loan and want to play an e active role in determining how your money should be used, a credit union may be the best alternative for you. If you live in Ontario, Pace Credit Union has 14 locations across the province – find out more information about what they can offer you at www.pacecu.ca/Personal/.
While banks do handle individual accounts, they focus mainly on attracting and maintaining large commercial clients, which are more financially lucrative. For the average consumer who wants individual attention at their bank, credit unions are geared more toward individuals. Thus, they offer mainly consumer services such as car loans, mortgages, credit cards and personal loans. Just like a regular bank, they also offer traditional savings and checking accounts with a limit insured up to $250,000. However, instead of being insured by the Federal Deposit Insurance Corporation, your money is insured by the National Credit Union Share Insurance Fund, or NCUSIF for short. When credit unions make a profit for the year, that money is returned right back to the members in the form of higher interest rates on savings accounts and lower interest rates on loans. Sound appealing? Do your research on credit loans and consider them as an alternative to the frustrations with conventional banking.