Top 5 Reasons to Choose a Community Bank or Credit Union - AMIBA (2024)

FAQs

What would be a reason for selecting a bank or credit union? ›

The Bottom Line. Credit unions can be ideal for a low-interest loan, lower mortgage closing costs, or reduced fees, but you'll need to qualify for membership. Larger banks may offer you more choices regarding products, apps, and international or commercial products and services, and anyone can join.

The close-knit nature of community banks allows for a more responsive and personalized level of service. Business clients often benefit from direct access to decision-makers, which leads to quicker loan approvals and more flexible problem-solving. Personalized attention isn't possible at larger banks.

Why Choose a Credit Union? Lower interest rates on loans and credit cards; higher rates of return on CDs and savings accounts. Since credit unions are non-profits and have lower overhead costs than banks, we are able to pass on cost savings to consumers through competitively priced loan and deposit products.

Compared to megabanks, local institutions offer lower fees, more free accounts, relationship-based banking, and personalized products and services. When you're ready to make the switch to a local bank, you'll want to visit the credit unions and community banks in your neighborhood.

Unlike banks that may take deposits in one state and lend in others, community banks channel most of their loans to the neighborhoods where their depositors live and work, helping to keep local communities vibrant and growing. Community bankers are typically deeply involved in local community affairs.

For example, community banks focus on providing traditional banking services in their local communities. They obtain most of their core deposits locally and make many of their loans to local businesses. For this reason, they are often considered to be “relationship” bankers as opposed to “transactional” bankers.

A community bank is a depository or lending institution that primarily serves businesses and individuals in a small geographic area. Community banks tend to emphasize personal relationships with their customers.

Higher returns, better savings, low interest on borrowings, and a sense of community – these are just a few of the benefits of credit union membership.

What is the biggest benefit of using a credit union? ›

The main benefits of a credit union vs. a bank are that credit unions tend to offer better rates and customer service, lower fees, and a national network of ATMs. However, a bank may offer more branches and products than a credit union.

But compared to banks, credit unions tend to be smaller, operate regionally and are not-for-profit. In many instances, they offer lower rates on loans, charge fewer fees and offer better interest rates for deposit accounts than traditional banks.

Community bankers provide better and more personalized service, are empowered to make local decisions, and are accountable to our communities. Community banks not only give back to our communities through investments, loans, and generous charitable support, but unlike credit unions, we also pay taxes, just like you.

Community banks commonly offer personalized service and investment in their communities, and some charge lower fees than big banks — although their offerings may be more limited than those from large banks.

Community Banks Are Generally More Conservative

In most cases, community banks are more conservative and better capitalized than large national banks, and for good reason. Smaller community banks must manage risks on a day-to-day basis, not just when reports are due, or something significant happens in the markets.

These factors are: fees, locations, services, interest, hours, and minimum account balance.

ATM Access and Fee Reimbursem*nt

Convenient access to ATMs is a pivotal feature in a checking account. The ability to withdraw cash without incurring fees, especially when using ATMs outside the bank's network, can significantly impact an account holder's financial choices.

The main benefit of utilizing credit unions is that they charge lower interest rates for the borrows as it is non-profitable and administered to help individuals.