When you’re ready to open a free checking account, you have several banking options available to you. However, there’s a reason why credit unions are preferred time and time again over traditional banks and online banks. Actually, we can name seven reasons.
While you have many choices available, the financial institution where you choose to open your free checking account can significantly impact your banking experience. That’s why you want to make sure you choose wisely.
1. Non Profit Status
The primary reason why credit unions offer better free checking accounts is their nonprofit status.
Unlike traditional banks, they don’t operate with their profit goals front and center. Instead, they have the interests of their members at the forefront. Since profit is not of primary concern, credit union practices are generally more beneficial to the members.
2. Members Have Voting Rights
As a member of a credit union’s cooperative organization, you are a co-owner and have voting rights to help determine important decisions within the credit union. These decisions include tasks such as selecting credit union board members. Your co-owner status allows you to vote on how the credit union operates and select options that benefit you.
As you continue reading, most of the primary reasons why a credit union offers improved service stem from their nonprofit status.
3. Offer Higher Savings Rates
Credit unions will pass along the savings they experience to their members. This is often seen in their ability to offer higher interest rates on their deposit accounts. Whether you have a free checking account, a high yield checking account, a savings account or money market account, you can expect to have a higher interest rate at a credit union.
4. Provide Better Member Service
Credit unions tend to be smaller in size with fewer chains and provide a more personalized member care experience.
Due to their size, credit unions get to know you by name or by face, instead of being just another member. By developing a relationship with the staff, you build a level of trust that makes handling your banking needs with the credit union better.
5. Charge Fewer Fees
Most credit unions strive to decrease the amount their members pay in fees. You will find a $0 fee for most transactions that you’d typically pay for at a bank. When a fee is required, like processing a returned check, you can expect to pay less than you would at a traditional bank.
Along with offering free checking accounts, many credit union accounts also have $0 minimum balance requirements. Although fees are generally small, they can add up quickly, so paying no fees or less in fees will save you money over time.
6. Flexible Decision Making
Since credit unions are smaller and customer-oriented, they are also more flexible with their decision making in regards to who is approved for checking accounts, credit cards, loans, etc.
Credit unions have the capacity and wherewithal to focus on each member application. When they do this instead of quickly passing paperwork through a process based on a set of predetermined requirements with no flexibility, they experience an increased acceptance percentage.
Also, many credit unions come to know their members individually. So, if you try to qualify for a product such as a credit card, the bankers will review your standing with the credit union and consider your history with them.
7. Lower Loan & Credit Card Interest Rates
While credit unions are known for offering higher interest rates for deposit accounts, they provide lower interest rates for loans and credit cards.
Again, since profit is not their primary focus, they can pass their savings on to you as a member in the form of lower rates. When you secure a loan or credit card from a credit union, you can save hundreds or thousands of dollars over the period in which you borrow money. That savings is a significant benefit to your finances.
Open A Free Checking Account At A Credit Union
When you’re ready to open a free checking account, consider doing so at your local credit union.
The seven reasons why credit unions have better checking accounts and offer an improved banking experience overall isn’t all-inclusive. Once you open a free credit union checking account you’ll discover more reasons why it’s a great option.
If you haven’t experienced the credit union difference, the time is now!
Checking Account Definition
A checking account is a transactional account that’s held by a bank or credit union. You deposit your funds into the account and your financial institution allows you to make withdrawals and deposits.
A checking account by definition of being transactional is designed for frequent transactions. You’ll typically have access to your funds through a debit card, checks, ATM, or by going to the bank branch in person.
Some common reasons for using a checking account include handling your daily spending needs, making online transactions, and paying your bills online or over the phone.
There are various types of checking accounts you can open, including a personal checking account, high yield checking account, student checking account, business checking account, and more. You must select an option that meets your specific needs.
Why Open A Checking Account?
Some of the reasons why you should open a checking account have already been touched on, but here’s a more detailed breakdown of the benefits of using a checking account to store and manage your money.
Your money is protected
One of the primary reasons to open a checking account is to keep your money safe. When you open an account with a bank or credit union that’s insured by the Federal Deposit Insurance Corporation (FDIC) or National Credit Union Association (NCUA), respectively, your money is protected in the event of a financial mishap.
The FDIC and NCUA will protect your funds up to $250,000 per account. If you choose not to use a checking account and instead relied on a cash-based system, you wouldn’t get this level of financial protection.
Conveniently access your funds
Along with keeping your money protected, you can conveniently and easily access money that’s stored in a checking account. There are several ways to do so.
Most banks and credit unions offer individual locations and branches. Even those that aren’t available in your area or are only online sometimes have sister branches you can visit to conduct financial business.
You can use an ATM to make deposits and withdrawals conveniently. Your financial institution might have an ATM or offer you the ability to access those within their network at a free or reduced rate.
Most accounts will also provide you with a debit card and checks so you can easily make purchases as needed.
Finally, when you set up a direct deposit through your employer, you gain access to your money quickly. Doing so allows you to easily access your funds without worrying about depositing a check and waiting for it to clear or cashing it and having to keep track of large amounts of money.
Online and mobile banking
Another convenience offered through a checking account is the ability to manage your finances through online and mobile banking.
When you complete your financial transactions online, you can view your balances and activities at your convenience 24/7, transfer funds between different accounts, and more.
Mobile banking is also an option available on a mobile app that allows you to complete many of your financial transactions from your phone or other mobile devices.
With online banking, you can work with banks you might not have previously considered that are only online or not in your area. Now, more than ever, it’s easier for you to bank anywhere and still receive the level of service you need and desire.
Deciding Why You Should Open A Checking Account
Are you still on the fence about why you need to open a checking account?
Review these additional resources for more information on the benefits of opening a checking account.