Difference Between Credit Unions & Banks

Video Transcript

"Hi, my name is Matt McKillen. I'm with Innovative Financial Group. A client posed a question to me today, "What is the difference between credit union and a bank?" Very, very distinct differences between the two. First off, a credit union is usually a membership approved type lending institution. They're usually available through certain types of employers. You have to join a credit union for example in order to be able to bank with them or it has to be off for three year work. A bank is generally a federally chartered lending institution which means that you don't, it doesn't have to be done through your employer; you don't have to join a bank, you just basically have to enroll with the bank and put your money there. Another difference between a credit union is that, they basically lend their own money and they're not under the same scrutiny, federal scrutiny as a bank is. I've been able to see in the past for a car loans for example that, I've seen credit unions offer interest rates as much as two percent lower than a bank does because they can make decisions about how much they want to lend their money out at. So those are couple differences. Again, if you can get a credit union account through your employer, I think really that maybe your best bet as far as getting the most favorable terms for savings, checking and for your car rates for example. Again, my name is Matt McKillen. I'm with Innovative Financial Group."