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What is the Difference between a Bank and Credit Union Explained

What is the Difference between a Bank and Credit Union Explained The difference between big banks and credit union is much more complex than people think, and here’s why. Both Banks and Credit Unions have pros and cons, that some people choose to overlook. And in this video I made sure to go over all the details of how a credit union works and also how a bank works and which one is a better choice for you.

Marketing:
The Main marketing tactic when it comes to a credit union is that, they are all about the people and not the money. And the more research I did the more I was able to actually confirm that statement. Mainly because credit unions work on a fix fee and not on a profit base, what this means is that every year they take the profits and reinvest it and put it right back into the business to lower loan rates and also increase savings accounts. It's almost a complete opposite for banks, because they take the money and use the profit from it and then try new ways to make more money for the investors but not the customers. But I do have to say, usually when the investor is making money a good customer is making money also because they get new deals. But if you don’t understand the terms and tricks to new deals then you might just get caught in all the noise.

Business Model:
Not that difficult to understand, a credit union is a non-profit that makes its money from fees to keep the lights on, and whatever profits they make they use it to better the deals for the customers. Banks take the money and work the customers for the benefit of investors and whatever profits they do make, investors profit but the customers usually loses.

Future:
The future is looking better by the day and I believe in the next decade or so, online banks are going to take over; because the best of both credit unions and also big banks. No fees, high-interest rates and they also have free investments accounts.

Key Questions Answered

1. What is the difference?

2. Why you should go with either or?

3. How to get the best deal?

*Pro Tip*
Information is key
Raw Notes/ research

Difference between a bank and credit unions

Questions:
The traditional banks are not the best right now, interest rates are not good and the fees are high.

Brief Summary: A credit union is a little bit different from a bank in the sense that its own by its members and its member are the people who have accounts with them. This way they look out for you. But a traditional bank is owned by investors and the bank is going to try to maximize profits for them at the customer's cost.

Nonprofit and banks are for profit

Products:
Checking’s, savings, CDs, home loans, auto loans, money market accounts, land, contractions, and manufactured homes

Tech:
Yes, they have apps to see your balance, deposit checks online and pay bills

Ownership: credit unions are owned by their members so in most cases not all they look out for their member and try to increase profits for them. But banks, on the other hand, are owned by an outside investor, so the bank has to try to maximize profits for their investors at the cost of the customers.

Exclusivity: Now credit unions are different from banks because in order to join one in some cases you have to meet a certain criterion. For example, where you work or where you live, if you’re in the military and so on. They also do this to keep their tax-favored status so they are required to limit their users to a group of people who share the same bond(example workplace) this is called Field of memberships
- But with a traditional bank, anyone can join if you have 25$ to open up the account.

Safety: yes, your money is insured by the government. But interesting tip it's not called FDIC insurance it’s Called NCUSIF back the government of course. So if the credit union goes under and you have at least or below 250k you’ll be covered and you’ll probably just be moved to another institution and be giving the same routing and account number. If you have more cash then spread across different accounts

Notes:
There are big credit unions and small ones just like big banks and small ones.

Best:
Like everything guys don’t limit yourself to either or, check them both out and whoever gives you the best deal go with them.

Pro tip
Information is key
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