(BPT) - The banking and credit union worlds are as much the same as they are different. Both are eager to earn your business and to provide you with loans, mortgages, savings and checking accounts. With that said, there are some significant differences between the two financial institutions. In today’s world, with cutthroat competition for your money, it’s worth understanding the advantages of both, and perhaps making a switch to one or the other to put yourself in a better financial position.
Credit union and banks: The differences
The primary difference between a credit union and a bank is that a credit union is a not-for-profit cooperative, meaning it’s owned by its members or customers. Profits made by credit unions are returned back to members in the form of reduced fees, higher savings rates and lower loan rates. A bank, on the other hand, is for-profit, owned by shareholders and focused on its stock value.
Joining a credit union is fairly simple, and membership is inexpensive — typically a one-time fee of between $5 and $25. Depending on where you live, many credit unions serve a geographic area, such as a state or metropolitan area, and are open to anyone who lives in that area. Some credit unions are employer-sponsored, so that anyone (including family members) who works for that organization can join.
There is no membership fee to “join” a bank. All you need to provide is some money to open a checking or savings account, a government-issued ID card, and some personal information (address, Social Security number, etc.).
Credit union advantages
Credit unions, by and large, are able to provide better rates to their members. Unlike a for-profit bank, credit unions return their "profits" to members in the form of lower rates on loans, higher interest on deposits and more personalized services. Other advantages of a credit union are that they tend to have lower fees on checks, withdrawals and electronic transactions, and many offer checking accounts with no minimum balance and without a monthly service charge. Finally, because credit unions are smaller and have a focus on member service, they may be more flexible when it comes to working with someone with financial challenges.
Banks, because of their size and scale, tend to offer more financial products than credit unions. For example, a credit union may have two or three different types of checking and savings accounts, whereas a bank may have dozens to choose from. Depending on where you live, banks will most likely have more locations for convenient access and more advanced online and mobile banking capabilities. Because of their geographic reach and wider range of offerings, a large bank could be a better fit for someone who wants specialized financial products (annuities, trusts) and needs access to nationwide locations.
Credit unions catching up
Depending on where you live, you may have numerous options for selecting a credit union. Some credit unions may have only one location and offer basic financial services like auto loans, checking and savings accounts. Other credit unions may have a large footprint in a market or state and offer the breadth of services you’d find in a bank. Most offer free, nationwide ATM access, and since many credit unions belong to cooperatives, members can access accounts across the country through other credit union branches. Bellco, for example, offers a full range of financial products and services, including mortgages, auto loans and checking accounts. Today, Bellco has more than 300,000 members who benefit from the advantages of a credit union, including lower interest rates on loans, higher yields on savings and access to thousands of ATMs nationwide.
Choosing a bank or credit union
Depending on where you live — urban vs. suburban vs. rural — your banking and credit union options will vary considerably. If you are in an area that offers both, there are several features to weigh and consider:
Services: Compare the basic banking services and access to specialized financial products, including advanced online services and mobile banking.
Rates and incentives: Look at the current rates, fees, and incentives — as well as overall benefits to being a customer or a member of the bank or credit union. Are there good reasons for joining one over the other?
Location: Evaluate options to access your accounts, whether it’s branch locations or ATMs or mobile banking services, and decide whether a national footprint is a requirement for your banking.
Finally, it’s important to note that both banks and credit unions insure your money up to $250,000 per person, across a group of accounts (checking, savings, and CDs would be considered one group). The Federal Deposit Insurance Corporation (FDIC) insures banks, and credit unions are backed by the National Credit Union Administration (NCUA).
(BPT) - With a population of more than 55 million and estimated buying power of over $1.5 trillion, Hispanics in the United States are continuing to shape economic trends; however, as new research finds, they're shaping digital trends as well.
This year's Bank of America Trends in Consumer Mobility Report shows Hispanic consumers are increasingly reliant on mobile devices to navigate daily life. In fact, 35 percent of Hispanics say they are more likely to interact with their smartphone in an average day than anything or anyone else, including their significant other.
The survey, which explored mobile trends and banking behaviors among adults across the country, found this digital lifestyle also extends to how they manage their finances. More than three-quarters (78 percent) of Hispanic consumers use a mobile banking app and 69 percent cite digital as their primary method of banking. These numbers mark a stark contrast from non-Hispanic users, whose percentages were 51 and 61 percent, respectively.
"This survey reinforces what our Hispanic customers show us every day - the Hispanic community leads the way in mobile adoption, usage and engagement," said Michelle Moore, head of digital banking at Bank of America, adding that it was the actions of the Hispanic community that spurred Bank of America to release its mobile app in Spanish. "We're committed to delivering solutions that meet the needs and behaviors of these consumers."
The report revealed further insights into Hispanic consumers' mobile-first mindset.
* Texting becomes the new small talk. Nearly one-third (32 percent) of Hispanics cite texting as their preferred communications method. The vast majority (80 percent) feel that the appropriate response time to a text is under an hour, and 54 percent text someone when they're in the same room.
* Documenting life moments. Hispanics are more inclined to share events with others, as nearly all (95 percent) say they want to have their smartphone on hand to capture important life milestones. They're also more likely than non-Hispanics to post these life moments on social media (78 percent, compared to 69 percent).
* Growing comfort with emerging payments. More than half (56 percent) of Hispanics would use or already use their phone to make purchases at checkout, compared to just 36 percent of their non-Hispanic counterparts. Seventy-seven percent of Hispanics say they're likely to use emerging payment methods such as mobile wallets and social media apps, and 72 percent cite they would use or already use their bank's peer-to-peer payments service.
For more information, visit bankofamerica.com/convenience.
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