4 Times You Should Pick a Credit Union Over a Traditional Bank

People tend to have strong opinions about where they store their money, and rightly so. Your bank or credit union is one of the most important institutions you can have in your life. The onus is on them to protect your wealth, help you generate more of it and give you an experience that makes you feel valued.

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It’s worth asking questions when you’re deciding whether to pick a credit union or a bank. Though credit unions and banks offer many of the same services, products and safety nets, they are unique entities.

The key distinction: a credit union is a not-for-profit financial institution. Deposits, generally up to $250,000, are insured by the National Credit Union Share Insurance Fund through the NCUA. A bank, on the other hand, operates for profit. Deposits in most banks — also generally up to $250,000 — are insured by the Federal Deposit Insurance Corporation (FDIC).

When is it better to pick a credit union over a bank? It’s an intricate question, given that they do share many qualities. However, experts do see instances where a credit union is the more appropriate choice .

When You Need Lower Fees and Higher Rates

Banks are increasingly competitive in the area of fees, with many — especially younger online banks — aggressively boasting low, or in some cases, no fees on certain products. Still, credit unions tend to have lower fees than banks.

“First, if you are interested in lower fees, credit unions generally have fewer and lower fees than banks — they are a good way to minimize your account maintenance costs,” said Erika Kullberg, a personal finance expert and the founder of Erika.com .

Kullberg added that credit unions often pay higher rates on savings accounts and loans, enabling you to generate wealth that way.

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When You Want a More Personalized Customer Care Experience

If you value personalized service and customer care that proves you’re appreciated, a credit union could be the right fit for you.

“Credit unions tend to be more member-focused and often offer more personal service,” Kullberg said. “As not-for-profit, member-owned institutions, credit unions place more emphasis on the needs of their customers, which often results in more personalized and flexible service. You might see this as a definite advantage if you prize the sense of community that you can get from banking with a financial institution in your community.”

When You’re Trying To Qualify For a Loan and Don’t Have Great Credit

Credit unions can make it easier to qualify for loans or credit in general, Kullberg said, adding that this is a bonus for those with “not-so-excellent credit histories.”

When You Don’t Plan To Move Away

Credit unions prioritize their local communities and may not have much brick-and-mortar presence once you go beyond a certain ZIP code.

“They won’t offer a lot of branches outside of your home region, because they’re focused on serving the members of their home community,” said Scott Lieberman, founder at Touchdown Money . “If you like where you live, a credit union makes sense.”

This article originally appeared on GOBankingRates.com : 4 Times You Should Pick a Credit Union Over a Traditional Bank