Credit Unions & Banks: What's the Difference?
There has been a lot of discussion about the difference between banks and credit unions lately, and I have to be honest; I wasn’t too sure what the differences were until I started working here a year & a half ago. Wow, what a completely different atmosphere! The big difference I noticed was how the two types of financial institutions are set up.
A bank is a business and their goal is to make money just like any other business. On the other hand, a credit union is a not-for-profit financial cooperative. Just like any other co-op that you can be a member of, everyone has a share within the organization and each member is an owner of the credit union. Credit unions are not-for-profit meaning that any funds they earn in excess of operating costs would be used to lower interest rates on loans and increase rates on savings. Sound a little confusing? Since a bank is a business any profit they have gets returned to their stockholders. Any funds in excess of operating costs at a credit union get returned to our members in the form of better rates.
What are some differences you have noticed? What prompted you to switch to IAA Credit Union? What has your experience been like?