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More money or more feesApr 06 '00 Write an essay on this topic.I'll preface this with my financial background--I have accounts at two credit unions and one bank, all of which with pretty exclusive membership criteria. Banks, in general, are not very restrictive about who can become a member, but credit unions are often quite restrictive about membership criteria (they have to be at least a little restrictive by definition, otherwise they are not a credit union). For the most part, I have been pleased with both banks and credit unions, but I am in the process of closing one of my credit union accounts because I have been extremely unhappy with it. The major difference that I have noticed between banks and credit unions is that credit unions offer very low rates of interest, but also very few fees for their services. Banks, while offering higher dividend rates, have many fees, often hidden ones, which can seriously cut into your savings. Is one necessarily better? Probably not. A credit union is probably better if you don't have a lot of money to start out with, but a bank will earn you more interest if you can avoid the fees. One nice feature of a credit union is that the members are in charge of its administration. This means that more of your money is returned to you, as opposed to going to some fat-cat banker. However, this is often offset because the credit union leaders often aren't as savvy and won't be able to get the same returns on their investments as the bankers would, thus they cannot give you the same rates. The lesson here is to research whatever financial institution you choose before you stick your hard-earned money into it. For example, many people don't realize there is often a fee for having a balance below $300, which can be a problem for students especially. When you are researching a bank or credit union, be sure to ask directly what kind of fees there are, and get a printed copy of all the fees that they charge so that you can decide if you are making the right choice. Also make sure you check up on what kind of customer service your bank or credit union will give you. Some banks will go out of their way for you, others will not. In conclusion, banks and credit unions both have positive features, so the best idea is to research all the financial institutions in your area and decide what best fits your financial needs.  |
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