Your bank would prefer you didn't know just how much money they're charging you to manage your money. No matter where you're banking, it's safe to assume your bank is making a tidy profit from fees and interest rates. The bottom line is that banks are for-profit companies, and everything is about their bottom lines, rather than yours.
Are there any alternatives?
The good news is that, yes, there are alternatives. Enter the credit union. A credit union is a not-for-profit organizations dedicated to serving the needs of their members.
Credit unions have been around for some time now, but it may surprise you to learn that, where banks are familiar to most consumers, many people still, have questions about credit unions. Are they safe places to keep your money? How are they different from banks? Just how does one join a credit union?
Unfortunately, this lack of familiarity can lead many to stick with what they know. You need to ask yourself, is it really worth clinging to the familiar when your local credit union can save you some serious cash? We don't think so, and to help bring you around to a credit union way of thinking, we've gathered three ways that credit unions can help save you money:
1. Spend less on loans and get more from savings
This one's simple. Because credit unions are not-for-profit organizations, you save money with higher rates of return. Though rates vary from institution to institution, you can typically expect credit unions to offer a higher interest rate for savings, and a lower interest rate for spending. Don't just take our word for it -- take a look at the actual numbers from NCUA, which compare average bank rates to average credit union rates. Though there are some places where banks are slightly lower or higher on rates, for the most part, credit unions look pretty good. If you're curious about the details, check out the rates offered by your local credit union.
2. Skip the fees
If better interest rates are not enough to convince you, then what about lower fees? Again, because of a credit union's not-for-profit approach, they are less likely to nickel and dime you with maintenance fees, penalties, and a host of other service fees. This isn't to say that credit unions are fee-free, but you can expect to see fewer fees on your monthly statement.
3. Get better customer service
Your time is valuable. So why waste your time waiting on long hold times with a big bank or impersonal customer service? Credit unions, even the larger ones, are smaller than banks. This means that, when you need to talk to them on the phone, you're more likely to get a person instead of a computer; and when you visit your local branch office, you're likely to see a familiar face. It may not be a cash savings, exactly, but better service will save you a ton of time, which definitely has a cash value if you do the math.
What are you waiting for?
Why let your hard-earned money trickle away by getting hit with higher banking fees and interest, when you can take your accounts to a credit union and enjoy fewer fees and better rates of return altogether? Your bank fees might not seem like much compared to other bills and expenses; however, they can add up to big numbers over time.
Don't stay in a bad financial relationship with your bank. Why not take a look to see what a credit union can offer you instead? You may be able to join simply by virtue of where you live, and even if you don't fall into a credit union's direct field of membership, you still may be able to join by way of your charitable support or affiliation with one of the organizations related to their membership. Once you've made the jump, there's not much left to do than just kick back and enjoy watching your savings grow.