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3 Times A Credit Unions Is Better Than A Bank
When we think of the best place to manage our money, banks are top of mind. But did you know that credit unions could actually offer more value to you as a consumer?
Credit unions, by nature, are member-owned organizations so they know their customers well and, since credit unions are regulated differently from banks, they have more flexibility in the rates they can offer on all sorts of financial products.
What do you need money for? Get matched with the right financial product.
3 times a credit union outshines a big bank
When you want the lowest loan rates
Since credit unions are not-for-profit institutions (i.e., their goal isn’t to drive up profit for shareholders), they can reward members with features like lower interest rates on loans. Banks, on the other hand, typically have higher interest rates to increase revenue.
Choice Rewards World Mastercard®
On First Tech Federal Credit Union’s site
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Rewards
Earn 2X points on groceries, gas, electronics, medical, household goods and telecommunications, 1X points on all other purchases
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Welcome bonus
Earn 20,000 points when you spend $3,000 in the first 60 days from account opening
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Annual fee
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Intro APR
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Regular APR
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Balance transfer fee
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Foreign transaction fee
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Credit needed
Pros
- Low APR
- No annual fee
- Popular 2X rewards categories
Cons
- Below average amount of time to earn the card’s welcome bonus
- No option to transfer points to travel programs
You can become a member of First Tech Federal Credit Union simply by joining the Computer History Museum (CHM) or Financial Fitness Association (FFA). The first year’s membership fee for the CHM or FFA is paid by First Tech, and you can cancel your CHM or FFA membership after opening an account with no impact on your credit union membership.
If you’re maximizing your savings
Credit unions’ non-profit structure is why they can generally offer higher savings interest, too. Since they don’t have so many physical branches, credit unions also have lower operating costs than banks, thus less overhead costs — meaning they can pass on the savings to you.
Digital Federal Credit Union (DCU) Primary Savings
Digital Federal Credit Union (DCU) is a Member NCUA.
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Annual Percentage Yield (APY)
5.50% APY on up to $1,000 (after, 5.50% to 0.05% APY for balances over $1,000)
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Minimum balance
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Monthly fee
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Maximum transactions
Up to 6 free withdrawals or transfers per statement cycle
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Excessive transactions fee
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Overdraft fee
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Offer checking account?
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Offer ATM card?
Yes, with a DCU checking account
Pros
- Strong APY
- Low minimum deposit
- No monthly fees
- Offers checking account and ATM access
Cons
- Cap on earning high APY
- Low APY for balances over $1,000
- Membership required
KeyPoint Credit Union Ultra Savings
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Annual Percentage Yield (APY)
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Minimum balance
None, but requires a $1,000 deposit to open
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Monthly fee
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Maximum transactions
Up to 6 free withdrawals or transfers per statement cycle
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Excessive transactions fee
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Overdraft fee
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Offer checking account?
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Offer ATM card?
Pros
- High APY on all balances
- No monthly fees
- No minimum balance to maintain the account
Cons
- $1,000 minimum deposit to open the account
- Membership required
Quorum Federal Credit Union HighQ Savings Account
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Annual Percentage Yield (APY)
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Minimum balance
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Monthly fee
None (or $10 if you opt to receive paper statements)
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Maximum transactions
Up to 6 free withdrawals or transfers per statement cycle
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Excessive transactions fee
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Overdraft fee
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Offer checking account?
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Offer ATM card?
Pros
- Strong APY with no cap
- No minimum deposit
- No monthly fees if you sign up for e-statements
- Offers checking account and ATM access
Cons
- $10 monthly fee if you sign up for paper statements
- Membership required
Affinity Federal Credit Union SmartStart Savings
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Annual Percentage Yield (APY)
4.00% APY on the first $10,000 (a dividend rate of 1.00% thereafter)
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Minimum balance
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Monthly fee
None ($2 if you opt for paper statements)
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Maximum transactions
Up to 6 free withdrawals or transfers per statement cycle
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Excessive transactions fee
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Overdraft fee
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Offer checking account?
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Offer ATM card?
Yes, with a checking account
Pros
- Solid APY
- No balance minimum
Cons
- High APY capped at $10,000
- $2 monthly fee if you don’t sign up for e-statements
- No ATM card without a checking account
For the most personalized service
Because credit unions serve their members, they offer more than just favorable rates. Focusing on a community of people, they tend to pride themselves in treating everyone fairly and personalizing service the best they can. This may appear in different ways, whether it’s looking beyond just your credit score when approving you for a loan or offering you access to assistance like financial counseling.
Or, in some cases, it means creating a financial product catered to a community of people like you. For instance, Andrews Federal Credit Union offers eligible first-time homebuyers up to $20,000 toward their down payment or closing costs. The money doesn’t have to be paid back if they stay in the house for at least five years.
Andrews Federal Credit Union Mortgages
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Types of mortgages
Conventional, FHA, USDA VA, jumbo, refinance, HELOC, home equity loan
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Terms
Fixed rate: 10, 15, 20 or 30 years; Adjustable rate: 5, 7 or 10-year initial period
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Minimum credit requirement
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Minimum down payment
3% conventional, 3.5% FHA, 0% with VA and UDSA loans
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Membership requirements
Free membership open to active duty and retired military personnel, people who work for an affiliated company or who work, live or worship in Washington, D.C. You can also become a member by paying $15 to join the American Consumer Council.
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Availability
Andrews Federal Credit Union lends in all 50 U.S. states and Washington, D.C.
Pros
- First-time buyers can get up to $20,000 in down payment assistance
- Offers both home equity loans and HELOCs
Cons
- Only has branches in Maryland, New Jersey and Virginia
- Doesn’t offer construction loans or professional loans
And Navy Federal Credit Union, overall, accommodates military members, veterans and their families. When it comes to mortgages, the credit union offers some of the lowest rates for VA loans on the market.
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At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every banking and credit union article is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of banking and credit union products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.
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