Credit Unions vs. Banks - Patelco Credit Union | Personalized Banking and Financial Services (2024)

FAQs

What is the best credit union to bank with? ›

The Bottom Line. Credit unions can be ideal for a low-interest loan, lower mortgage closing costs, or reduced fees, but you'll need to qualify for membership. Larger banks may offer you more choices regarding products, apps, and international or commercial products and services, and anyone can join.

One of the reasons people might choose to bank with a credit union instead of a traditional bank is because credit unions are known for offering a more hands-on and personalized approach to serving their members.

Credit unions tend to have fewer branches than traditional banks. A credit union may not be close to where you live or work, which could be a problem unless your credit union is part of a shared branch network and/or a large ATM network such as Allpoint or MoneyPass. May offer fewer products and services.

For decades, bankers have objected to the tax breaks and sponsor subsidies enjoyed by credit unions and not available to banks. Because such challenges haven't slowed down the growth of credit unions, banks continue to look for other reasons to allege unfair competition.

Generally, credit unions are viewed as safer than banks, although deposits at both types of financial institutions are usually insured at the same dollar amounts. The FDIC insures deposits at most banks, and the NCUA insures deposits at most credit unions.

People choose banks primarily because of the convenience of multiple branches across the country, along with better technology. On the flip side, people choose credit unions primarily because of discounted loan rates, higher interest rates and better customer service.

Federally insured credit unions offer a safe place for credit union members to save money. All deposits at federally insured credit unions are protected by the National Credit Union Share Insurance Fund, with deposits insured up to at least $250,000 per individual depositor.

Can you use a credit union like a bank account? ›

CU SoCal is one such credit union that offers all the banking services you'd expect from a large, traditional financial institution (like a big bank), including mobile check deposit, online banking, mobile transfers and payments, and much more.

Yes, you can get a credit card through a credit union. In fact, many credit unions offer credit cards with more competitive rates and terms than a traditional bank. And like any other type of credit card, one issued from a credit union can also be used to make purchases or cash advances.

Credit unions are insured by the National Credit Union Administration (NCUA). Just like the FDIC insures up to $250,000 for individuals' accounts of a bank, the NCUA insures up to $250,000 for individuals' accounts of a credit union. Beyond that amount, the bank or credit union takes an uninsured risk.

Experts told us that credit unions do fail, like banks (which are also generally safe), but rarely. And deposits up to $250,000 at federally insured credit unions are guaranteed, just as they are at banks.

Navy Federal is the country's largest credit union with around $168.4 billion in total assets and 13.2 million customers at the end of 2022, according to the latest data from the NCUA.

Celebrating more than 80 years in years in Arizona, Desert Financial is the state's largest and most trusted credit union.

However, because credit unions serve mostly individuals and small businesses (rather than large investors) and are known to take fewer risks, credit unions are generally viewed as safer than banks in the event of a collapse. Regardless, both types of financial institutions are equally protected.