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Which Is Best For You?


Deciding where to store your money, open a credit card or apply for a loan can be overwhelming. To make it even more difficult, your choice of banking institution — whether it be a bank or a credit union — plays a big part in the type of experience you’ll have.

Below, CNBC Select digs deeper into the difference between banks and credit unions, outlines the pros and cons of each and helps you decide which to choose.

What we’ll cover

How banks and credit unions differ

Alliant Credit Union High-Rate Checking

Alliant Credit Union is a Member NCUA.

  • Monthly maintenance fee

  • Minimum deposit to open

    $25 when opening online or over the phone

  • Minimum balance

  • Annual Percentage Yield (APY)

    0.25% with paperless and recurring monthly electronic deposit

  • Free ATM network

    80,000+ Alliant network ATMs

  • ATM fee reimbursement

  • Overdraft fee

  • Mobile check deposit

PenFed Credit Union is another one available to anyone, you just have to open a PenFed savings account with a $5 initial deposit.

PenFed Regular Savings

  • Annual Percentage Yield (APY)

  • Monthly maintenance fee

  • Minimum deposit to open

    $5 deposit to establish yourself as a PenFed member

  • Free ATM network

    Access to over 85,000 ATMs nationwide

PenFed Premium Savings

  • Annual Percentage Yield (APY)

  • Monthly maintenance fee

  • Minimum deposit to open

    $5 deposit to establish yourself as a PenFed member

  • Free ATM network

    Premium Online Savings Account is not accessible from an ATM.

Pros and cons of banks and credit unions

Before choosing to go with a bank or a credit union, know the distinctive features that set each financial institution apart.

Pros of banks

  • Diverse financial products and services: The big banks typically offer a wide variety of financial products and services.
  • Extensive physical branches and ATM networks: Banks tend to have more branches and ATMs nationwide, which can make it easier to bank in person or access in-network ATMs on the go.
  • More digital banking options: Banks often provide more advanced digital banking options when it comes to features like mobile apps.

Cons of banks

Pros of credit unions

  • Lower fees: Credit union products may come at a lower price than what banks offer and some credit unions even waive certain fees on bank accounts and credit cards.
  • Competitive rates on deposits: Credit unions sometimes offer more competitive interest rates than the big banks.
  • Personalized customer service: Credit unions are known for providing more personalized and responsive customer service due to their membership-based formation.

Cons of credit unions

  • Membership requirements: Credit unions require you to become a member in order to open an account, and the eligibility often doesn’t apply to everyone.
  • Limited access: Credit unions usually serve a specific community or region, resulting in fewer branches and ATM access.
  • Fewer product options: While credit unions offer many of the same products as banks, you may not have as many options for each as you would with a bank.

Bank or credit union? How to choose

Deciding between banking with a bank or a credit union is generally up to your personal preferences. Consider what credit unions you could even be eligible for in the first place and then compare the products you’re looking for with a similar product from a bank. For the more accessible route, a bank may be a better choice, but if you’re looking for more of a community-based experience, a credit union is best.

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Bottom line

Banks and credit unions each come with different features that can shape your banking experience. Make sure to shop around depending on your specific banking needs.

Why trust CNBC Select?

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.





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