Deciding Between A Credit Union And Bank

by Barbara Bogaev

The financial crisis and its fallout cast Wall Street banks in a very poor light, and sent many people looking for alternative places to stash their cash. Some turned to credit unions, but at least initially, many found them lacking. Over the last few years, however, credit unions have stepped up their game. This week the consumer website Bankrate released its 2013 survey of credit unions. Greg McBride is Bankrate’s senior financial analyst and joins us to talk about its latest findings. He says at the very least people should consider credit unions.

“[Credit unions are] not a one-size-fits-all solution by any means. But I think when you look at how compelling the offers can be from credit unions, we found that more than 70 percent of the nation’s largest credit unions offer a free checking account. That’s about twice the pace that we see among banks. I think that warrants them being in the conversation,” says McBride.

Related: The pros and cons of credit unions

How can credit unions offer free checking? McBride says credit unions are by nature not-for-profit cooperatives. And free checking at many credit unions has been a staple long before it became fashionable among banks. He says even with higher regulatory and compliance costs, credit unions have other levers they can pull before they start instituting fees on checking accounts.

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