CU 101. A credit union (CU) is a financial institution that often provides just as many similar services as your local bank. The main difference is that generally banks are for-profit institutions, while CUs are owned by its members.
As a not-for-profit the CU does not have profitability as its top priority. Banks on the other hand (especially large ones) are primarily focused on profits. The CU is obligated to use the “profit” to pay back the members or go back into the organization to make it better in some way.
What does this mean for you and I? Lower (or no) fees and better rates. Credit unions still may charge fees for services to generate income, but the difference is the CUs are striving to generate just enough income to meet their expenses, whereas banks may try to make as much profit as they can without losing the customer.
The downside to many CUs is that they are outdated and offer fewer products and services than the big banks. Most of the CUs I have stepped into looked like they were decorated with the hand-me-downs from the local DMV.
The exceptions to this rule seem to be the larger CUs. The more branches that a CU has is usually a good indication of the amount of comparable services offered. The largest CUs tend to offer the same products and services as the big banks for a lower overall cost to the customer.
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I agree that CU is the way to go. I have been using since 1998 and continue to use http://www.dcu.org. This CU has a really good online banking service. Here are some features I love:
1. They reimburse incurred ATM fees charged by other banks for up to $5 each month. My CU dont charge any ATM fee at all.
2. No minimum balance required.
3. No fees on transactions – purchases or transfers.
4. PC deposit (just need scanner to scan the checks) – i love this feature! I have another bank which is not a CU and is pretty large and they dont have this feature. The site has a lot of good information and they are on facebook. They are not so behind in terms of technology is what I am trying to point out.
5. I can easily transfer funds. In fact, my friends and I uses this feature to pay one another.
6. Once a member, I can easily open additional accounts online.
7. Bill pay is available.