A Better Banking Option?
“Do not save what is left after spending, but spend what is left after saving.”
– Warren Buffett
What if I said you could potentially reduce banking fees, receive better customer service and even get preferential rates for savings, loans and debt instruments? Well the good news is you can — and it’s easier than you might think. Plus, you don’t even need a huge initial deposit to qualify. All you may have to do is join your local credit union.
As a member-owned financial cooperative, credit unions date back to the mid 1800s and operate as not-for-profit entities. This means their purpose is to serve their members as opposed to shareholders. When you join a credit union, you become a member and can often benefit from that status in the form of lower fees and more advantageous interest rates than are typically available through commercial banks.
According to U.S. News & World Report, for example, as of May the average 60-month new car loan rate was 7.41% for banks and between 2.19% and 3.5% for some of the largest credit unions in the country — a difference of more than 5% at the bottom end of the range.
You have to qualify in order to join a credit union, but luckily there are many ways to do so. You may meet the criteria based on where you live, where you worship, where you work or because of your membership in some other organization. Mycreditunion.gov has a locator feature to help you find out what credit unions might be available in your area.
The trade-off for better service, interest rates, and lower fees can be a shortage of branches and ATM availability. So it’s important to check out where the closest ATMs are (or if they participate in a larger network that you can access) to make sure that you can make deposits and withdrawals conveniently.
Not all credit unions have lower fees or better interest rates in every areas compared to traditional banking. So it’s important to shop around and ask about the products and services you’re most interested before you make a switch.
Money can’t buy happiness, but that doesn’t mean you have to give it away either. If better interest rates and lower fees are paramount considerations for you, starting a relationship with the credit union may be well worth the investment in time and effort.
