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What is the difference between a credit union and a bank i’m going to explain those differences today to you as well as what the similarities are so many people do not understand what’s the difference between the two what are the similarities i cannot wait to share this with you guys good day subscribers thank you so much for joining me today on a financial
Education channel so today i’m going to explain the difference between a credit union and a bank and i’m also going to explain what the similarities between the two are so many people do not understand the differences they see a credit union on the corner to see a bank and they think it’s the same exact thing not at all two very different things so first off a big
Is owned by shareholders so a bank is for profit they want to maximize profits and that’s what a bank is about a credit union is owned by the members of that credit union that’s who owns a credit union a credit union is not for profit not for profit as what a credit union is now a credit union you generally have to pay to get in with the credit union so you pay $25
A year or $50 a year something like that and it’s almost like getting a costco membership or something like that and you pay this annual fee and that’s your annual fee once you’re in the door you have the same type of opportunities you do in a bank in the respect that you’re going to have home loans you can get with that credit union just like you can get with the
Bank you have auto loans just so you can get with the bank things like that now some differences may be um like private wealth managers things like that a lot of banks do full in-house they have everything at a bank generally most of the big banks you know chase wells fargo bank of america all those guys they have everything you possibly imagine whether you’re a
Low-income person or you know worth a hundred million dollars and you need private wealth management and all those kinds of things so credit unions are really good for the lower-income people and it’s for in definitely for the middle class as well because a lot of times you can have relationships with the credit union that you can’t have with the bank so you can
Get loans sometimes that you cannot get approved for at a bank just because you’re a member of that credit union you have a relationship you have you know just a relationship built up with them it’s much more mom-and-pop than a bank a bank should strictly look at the numbers it does your credit score meet does your income meet and you know those kinds of things
There’s really no relationship there because they’re so big they have millions if not tens of millions of customers you’re the credit union you might be one of you know a few hundred or a couple thousand customers for that credit union now they both have atms and they both have tellers and all that kind of fun stuff now where credit unions also different is you
Can really sometimes get lower interest rates through credit unions than banks remember what i told you before banks are for-profit so they want to maximize profits credit unions a lot of times they don’t need as much profit because they’re not for-profit and if they do have any extra income at the end they can just cancel fees for customers and those kinds of
Things so the credit unions goal is not to make a profit the credit unions goal is to basically break even or just make a small profit and then what they do is they just distribute that back to the members who are the owners of the credit union where as a bank it’s all about you know having as much money coming through the door as possible i hope this explained
What the differences is between the two and just so you guys know they’re both regulated so credit unions regulated a bank is regulated and though your money is insured at a credit union in the same way it is it a bank so your money is guaranteed by the federal government basically hope this helped guys thank you so much for watching if you didn’t understand what
Differences between those two i hope you understand now if you have family members or friends that you think they might not know this stuff go ahead and share it with them thanks guys have a great day
Transcribed from video
Banks VS Credit Unions By Financial Education
