When it’s time to open up your first bank account on your own, a lot of questions come to mind. What kind of savings account should I open? How much money should I save? The list goes on. But one of the first questions you should consider as you take this next step in your financial journey is: what’s better—a credit union or a bank?
Like most things in the financial realm, the answer really isn’t that simple. There are many advantages and drawbacks you’ll need to consider before you open an account with either institution—and what’s best for your financial situation isn’t necessarily what makes the most sense for your partner, your parents, or your best friend.
In fact, a 2017 study found that 54% of Millennials preferred to bank with megabanks (like Bank of America or Chase), 16% liked banking with regional banks (such as PNC or CIT Bank), and 14% preferred credit unions.
In order to decide whether you should manage your personal finances with a credit union or bank, you should consider the following:
- The similarities between banks and credit unions
- Both offer financial services
- Both have the ability to be federally insured by the NCUA or FDIC
- Some have comparable rates
- How banks and credit unions differ regarding:
- Savings rates
- Financial services
Once you’ve reviewed these key factors, you’ll have a better understanding of which financial institution would make the most sense for you.
Need some guidance to help you determine who you should bank with? View our infographic below to learn more!
*Data based on national averages for June 2019
FDIC.gov Deposit Insurance FAQs | Investopedia Credit Unions vs. Banks | MyCreditUnion.gov What is a Credit Union? | National Credit Union Administration Comparison CU and Bank Interest Rates Jun 2019 | The Financial Brand Banking Providers Must Overhaul Lending for Digital Millennials