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Choosing Your Financial Institution

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Choosing Your Financial Institution

Posted on by Fox Communities

Credit Unions vs. Banks

Bank Guy

Credit Union Guy

As you contemplate moving beyond your piggy bank, the two types of financial institutions that you’re most likely to deal with are credit unions and banks. They offer essentially the same products and services, including savings and checking accounts, credit cards, auto loans, mortgages and investment products, but their values and motivations are very different.

Credit Unions

  • Member-owned financial co-operative
  • Not for profit—excess earnings are distributed to credit union members in the form of profit-sharing, lower loan rates or higher yields on savings. The average credit union account accrues 35% higher interest than a bank account of the same type; view Fox’s rates
  • Run by a Board of Directors who are elected by fellow credit union members; learn more about Fox’s Board
  • Members can vote on how their credit union is run
  • Membership eligibility requirements vary; see Fox’s specifications

Banks

  • Shareholder-owned financial institution—not owned by bank customers
  • For profit—profits not shared with bank customers
  • Run by paid Board of Directors, not necessarily bank customers
  • Customers have no say in how their bank is run
  • Open eligibility; anyone can be a customer

Access to Money While Traveling

Credit Unions – Unlike national banks that have ATMs across the country, credit unions are typically community based, with far fewer locations. However, they often belong to ATM networks that allow you to use other credit union or convenience store ATMs free of charge. Fox is no exception to this… all members of Fox are able to use any of the 5,000+ Alliance One surcharge-free ATMs.

Banks – The big banks have ATMs in most major cities. This will give you free access to your money nationwide. However, if you need to use another financial institution or convenience store ATM, get ready to pay a higher service charge.

Think About Your Money

Average online monthly bill payment fee – Bank $6.95; Credit union $0

Average fee to use another financial institution’s ATM – Bank $2.21; Credit union $1.07

Average overdraft fee – $34.48; Credit union $27.82

Sources: American Bankers Association, Consumer Reports, Credit Union National Association, Datatrac, FIS PACE Study, Forbes, University of Wisconsin Center for Cooperatives, U.S. News & World Report and Wise Bread (Brought to you by It’s a Money Thing)

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