Credit Unions: Good for you, Good for the Community

If you could get a better deal on tools from the local hardware store than you could at the big box store, wouldn’t you shop there?  If you could get fresher produce from the farmer’s market rather than the grocery store, wouldn’t you stop by? Getting financial services from a credit union is no different. Sometimes local businesses are a better choice for how you spend your money because they keep the money in the community.

From the parking lot, a credit union can look a lot like a bank.  They both have teller windows and ATMs, and offer products like Checking Accounts, CDs and Home Loans.  But, from the inside the two are actually quite different.

At a bank, money that is held for deposit is used to create profits by loaning it to other entities, or by investing it in ventures that they hope will make its shareholders a profit.  When you put money into the bank, it is like you are lending it money.

At a credit union, they also collect deposits to use for loaning to other entities.  But, when you put your money into a credit union, you become a shareholder in the company.   And, credit unions are local in reach, not global.  So, the loans that they process go to help others in the community - your community. They aren’t investing in large scale projects in other cities but in home, auto and business loans right here in your community.

Big banks have to compete with other big banks.  Spending profits on national advertising, federal regulations, and grappling with risk levels make shareholders happy with profit levels. Credit unions have smaller organizational structures, which enable them to keep more of the proceeds they collect from their investments. This typically means lower rates on loans, as well as higher yields for deposits.

So, the next time you are looking for a home loan, auto loan, or even a savings account, try out your local credit unions.  And, keep your money working for your neighbors right here.