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You bank at a credit union. If you belong to a credit union, you might even call it a bank. Credit unions and banks offer almost identical services. What even is the difference between a credit union vs bank?
If you’re looking to start a checking account, get a loan or open a new credit card, read the sections below to get a better grasp of the differences between these two types of financial institutions.
At a bank, a group of shareholders makes decisions about the direction of the business based on how much profit it’ll generate. Generally, the best way to make a profit is to provide customers with the tools and services they want. But sometimes, profits are put over the needs of people in the form of high-pressure sales and discontinuing products that may be popular but aren’t generating enough money.
Instead of operating for profits, a credit union, like Arsenal, is classified as a not-for-profit. A group called the board of directors works together with the CEO and other executives to put the needs of the members before profits. We’re not a charity organization like a nonprofit, but we’re more concerned with helping people than making money for the sake of making money.
For example, if a bank has a program that isn’t bringing in enough money to justify its existence, it’ll get axed. At a credit union, if a program isn’t very popular, but it’s still benefiting a portion of the membership, we’ll decide to keep it just so more people can take better control over their finances.
You’re a part owner
If you belong to a credit union, you’ve probably seen something in your online banking called a Share Savings with a set deposit amount in it. This “share” is your stake in the credit union. Congratulations! You’re a part owner of the financial cooperative movement.
Being a part owner gives you access to all of the products and services a credit union offers. It also entitles you to a vote at the credit union’s annual membership meeting where you can help choose who serves as a volunteer on the board of directors.
You can choose to get as involved in the credit union as you’d like. If you’re happy using your checking account to make basic transactions or using us for a low-rate auto loan, we’re happy to help you. If you want to take more of a leadership role, the opportunity is there.
Services that are more focused on you
Again, credit unions run as not-for-profit organizations. We still want to turn a profit, but only by helping people. Every individual who banks at Arsenal is unique. It would be impossible to mention each way you could potentially benefit from the services offered. Here are three unique examples that Arsenal provides its members:
Totally Free Checking: Most financial institutions no longer offer a basic, free checking option. It’s important that you’re able to access your money for free, whenever you need to.
Personalized service in branches and online: Not everyone wants to contact their financial institution the same way. When you’re a member, you can always visit a branch to talk to us. But you’ll also receive the same personalized service when you start a live chat online.
Digital banking tools: Banking isn’t confined to the 9-5 world. You need to be able to take care of transactions anytime, anywhere. Your digital banking tools need to make your life easier instead of being another task you need to complete. Our system works with you to help give you more of your day back.
Lower rates on loans and higher yields on deposits
The profits that credit unions make trickle back to you in the form of lower rates when you borrow and higher yields when you save. Here are three real-life examples of how this happens at Arsenal.
Saving you money on auto loans: Getting a new car is exciting. Sometimes, when you’re at the dealer, you may just sign on any financing option because you want to drive away that day. If you get stuck in a bad auto loan, we want to make sure you have a way out with a lower rate.
Debt consolidation options: Credit cards are a great tool, but they can get you in trouble if you’re not careful. If you do get into trouble (and a whole lot of people will), you could potentially consolidate to a lower-rate option using a home equity loan, personal loan or lower-rate balance transfer credit card.
High rates and short terms on CDs: If you have money sitting in a savings account somewhere, you should put it to work. Most credit unions offer higher rates on deposits. We have short-term options that give you gains faster.
Putting money back into the community
Most credit unions operate on a much smaller scale than big banks. Because of this, our focus is on a much more local level. When you bank with a credit union, it’s much more likely that your money stays in your community instead of going to an out-of-state corporate headquarters.
For example, when you keep money on deposit with a credit union, those funds are going to help your neighbor refinance their auto loan at a much lower rate. Speaking specifically for Arsenal, we’d much rather help the community get ahead financially than slap our name on a sports arena or run national television ads.
It’s not just money. Most credit unions also have community involvement programs that allow their employees to give back time to the communities they live and work in. Arsenal even has a grant program designed to help nonprofits serve their clients in the unique ways they’re set up to do.
Cooperation over competition
Banks are set up to operate in their own unique ecosystems. If you have a debit card with one, you’re going to get charged a fee to use the ATM of another.
Some credit unions actually team together to help their members avoid fees and gain more access to their money. Using the ATM CO-OP Network, you have access to over 30,000 free ATMs across the country, with 250+ of those being in the St. Louis area.
If you’re ever traveling and need to make a deposit, withdraw cash or pay a loan, you can visit credit unions that are part of the shared branch network.
