The reputation of big banks has taken a hit in recent years, leaving consumers and business owners uneasy about where they should put their money. Though many think that their only options are big banks or smaller community banks, there’s a third option that surprisingly comes out on top in numerous situations. That option is credit unions.

There are two key difference between banks and credit unions. The first is that credit unions are not-for-profit institutions. Because they are not generating profits for their owners, they can offer more benefits to customers. The second is that credit unions are literally owned by their customers (who are known as members) instead of by stockholders. This makes them far more customer-focused. Their primary objective is to serve the interests of their members, not shareholders.

Most credit unions have conditions or requirements for membership, and this fact has created a common misconception that they are difficult to join. Simply by living in a certain area or working for a certain employer, you may qualify for membership.

Here are a few of the benefits that members of credit unions enjoy:

Enhanced Customer Service

Being smaller in size and member-owned amounts to attentive customer service. Unlike big banks that might have millions of customers around the world, most credit unions have only a few thousand members centered in one geographic location. A focus on these members means questions get answered more quickly and any disputes or problems usually get resolved in a reasonable amount of time and to the customer’s satisfaction.

Lower Fees 

Due to the decreased overhead of having few locations, a simpler list of product offerings, and a nonprofit mission, credit unions can almost always offer lower fees on their products. According to Bankrate.com, more than 70% of the biggest credit unions offer free checking as opposed to only 39% of banks.

Lower Interest Rates

Another benefit that comes from lower overhead is lower interest rates. Members can often secure better rates on mortgages, home equity loans, and auto loans, and even on credit cards issued by the institution.

When you add up the benefits, it makes sense to look into credit unions when you want to open a checking, savings, or money market account, get a new credit card, or finance a major purchase. To find a credit union near you, do just do a Google search for “credit union” + (your town or city), then check the membership requirements and compare fees and interest rates with the banks in your area. Switch, and you could end up saving substantially.

If you have questions about saving, investing, or money management, please contact us in Millville, NJ.