Can you remember the first financial decision you ever made? It likely took place a while ago – long before you got your first job. It might even be as far back as when your annual income consisted of money from the Tooth Fairy and the occasional lucky penny you found on the sidewalk.
The very first financial decision you ever made was where to keep your money.
When you first made that decision, you might have chosen to keep your money in a piggy bank, in your sock drawer, or even buried in the backyard sandbox like pirate treasure. But by now, you might have realized that these options aren’t as convenient – or as secure – as you thought they were way back when.
It’s time to move past the piggy bank. Opening an account with a financial institution keeps your money safe, and also makes it easy to manage and access. It’s an important decision, so you need to know the facts. Like what your options are, and the major differences between banks and credit unions.
The main difference between banks and credit unions is how they’re structured. Banks are for profit. This means that banks have numerous expenses that credit unions simply don’t have. Banks have to pay their shareholders, their private investors, and even their board of directors. And all this is in addition to regular operating costs. Banks are set up in a way that allows a select group of people to make money off of your banking activities.
Credit unions, on the other hand, are set up in a way that allows all of their members to benefit from their profits. Credit unions are financial institutions that are member-owned and operated. Once the operating costs are covered and reserves are set aside, the profits are distributed back to members in the form of free banking products, lower interest rates on loans, and higher interest rates on savings accounts. Credit unions in the United States are also exempt from federal and state income taxes, which translates to even more profit coming back to members.
Credit unions sound pretty great, right? You might be wondering why some people choose banks over credit unions, even though credit unions consistently outperform banks when it comes to deposit rates, loan rates, and customer service.
The simple answer is that banks are bigger, and some people believe bigger is better. A more effective approach would be to figure out your banking priorities. Here are some factors to consider:
Am I eligible for an account?
Banks are open to anyone. Credit unions, on the other hand, have membership requirements. But don’t let that intimidate you! Requirements can be as simple as living in a certain community or working in a certain field.
Red Canoe Credit Union is open to anyone who lives, works, or worships in Washington State. It’s also open to those who live or work in the Oregon counties of Linn, Benton, Lane, Marion, and Polk. You can even become a member if you have a family member who meets one of these requirements!
How much does it cost to get set up?
You might be worried about the fees associated with opening an account or the minimum balance requirements that are common at big banks. Joining a credit union involves purchasing a share that makes you an equal owner and member of the credit union. At Red Canoe, you purchase your share with a $5.00 deposit in a savings account. And it’s as simple as that. Your Simply Smart Checking account is absolutely free and has no minimum balance requirements or hidden fees!
Will I have good access to ATMs?
Most people believe that only big banks have nationwide ATM networks, but credit union ATMs are just as accessible. In face, the largest credit union ATM network is actually larger than the largest bank ATM network. As part of this CO-OP network, Red Canoe members can access their money from nearly 30,000 ATMs across the country for free. If you can’t make it to a Red Canoe ATM, no problem! Just look for the red CO-OP ATM logo to find surcharge-free ATMs.
What can I do online?
As technology continues to evolve, more and more financial institutions are offering online banking services. Red Canoe Credit Union offers free, secure online banking services that can be access from a tablet, a desktop, and even your smartphone! You can easily check your balance wherever you are. You can even open the Red Canoe mobile banking app using Touch ID. Schedule payments, transfer money between accounts, and manage your money on your terms all from the comfort of wherever you happen to be. Taking advantage of online products can be super-convenient, and it means you can avoid a trip to the ATM or the nearest branch.
What can my financial institution do for me?
Ask about products that are tailored to your situation. How do the interest rates compare to other financial institutions? Are there free products you’re eligible for? Don’t settle for a financial institution just because you need an account — you should also want to have an account there.
At the end of the day, choosing a financial institution is a personal decision with a huge influence on how you manage your money and your time. If you make the effort to ask questions and compare services, you’ll find the best home for your finances. We hope you’ll stop by and see us so we can help you start your financial journey!