As the economy continues to struggle during these harsh times, big name banks have been losing credibility and customers. More and more people are leaving large corporate banks for the appeal of a more personal experience and more individualized handling of their finances. Big name banks have been under the spotlight off and on for many years now with charges of unscrupulous business ethics. Choosing the right bank for your financial needs is extremely important in today's society. Before putting your money and trust into any old banking system, you should carefully examine and research your choices so that you can make the most appropriate selection for your lifestyle. With credit unions steadily on the rise among the general public, it is important to know both the pros and the cons of these banking organizations.
The Pros of Credit Unions
1. Member Owned: This is one of the major ploys that smaller credit unions have. Every member that has an account with a credit union is a partial owner of the organization. This means that you are better able to have some say in the business proceedings of a credit union. As a member of the credit union, you get to vote on who you want to serve on the Board of Directors for the union. This means that you have some control of over the way in which your bank runs.
2. Nonprofit: Big name banks are businesses. They are run on the principle of making a profit. In this way, there are times that "big banks" may consider their need to make a profit before they consider their customers best interests. Credit unions are nonprofit organizations that are community oriented. Because they are not in search of making a profit, credit unions can often offer services at lower costs.
3. Better Interest Rates and Loans: For the most part, credit unions are able to offer higher interest rates on savings accounts, lower interest rates on loans and mortgages, and better loan services overall. These better rates are available to members because the credit union is nonprofit. The profits that the bank does make are applied back to the member through better interest rates and loan services.
Cons of Credit Unions
1. Accessibility: The biggest drawback to using a credit union over a small bank can be accessibility. In general, there are fewer branches, ATMs, and online options for credit union users compared to corporate banks. This is not always the case where many smaller credit unions offer ATM access at numerous non-affiliated credit union ATMs. Because credit unions are community owned and operated, they are not as easily accessed nationwide. Also, due to their smaller size, 24 hour service is not often available and the online accessibility of these credit unions can be of lower quality that with big banks.
2. Less Horsepower: Another drawback to small credit unions has to do with needing the "horsepower" of the big name banks for your portfolio. So, if you have a high-powered portfolio that may require some of the ploy that big banks have in the financial world, you should keep that in mind. Small credit unions are great choices for the average person looking to open a checking and savings account, make a few money market investments, and take out a simple loan or two. However, if you have a portfolio that requires a high-yield savings and money market account, the big name corporate banks may be your best option.
About the Guest Author:
This is a guest post by Nadia Jones who blogs at accredited online colleges about education, college, student, teacher, money saving, movie related topics. You can reach her at nadia.jones5 @ gmail.com. The opinion expressed is that of the guest author. If you are interested in writing a guest post, please contact PF Stock at the Email address listed in the sidebar.