A Bank Or A Credit Union?

I'm getting ready to move from the west to the Massachusetts/ New Hampshire area

, and the credit union I have here is not located on the east coast. Consequently, I will need to determine where I will do my Massachusetts banking. Should I go with a local MA or NH credit union or is a bank a better choice? I am not unique in my situation. Many people move to another state and are faced with the decision of whether to go with a bank or a credit union. What are the benefits and drawbacks of each?

Banks tend to be bigger, often national, establishments. Had I belonged to a large bank here on the west coast, chances are I could have found the same bank in MA or NH and would therefore not need to change institutions. If I was not moving at all but simply traveling, there is still a measure of convenience if I wanted to deposit or withdraw money from my account while I was on the other side of the country.

Since anyone can open an account with a bank, I could easily join a bank in MA. However, banks are owned by investors, and as such, the bank's goal is to make money for its investors and stock holders. A board of directors makes the decisions; the customers do not vote or help with the process. In addition, banks are federally insured by the Federal Deposit Insurance Corporation (FDIC).

Credit unions, on the other hand, are localized. They are intended to serve a particular community or neighborhood. Unlike a Massachusetts bank, a credit union in Massachusetts would be only for the people living in Massachusetts. If I joined a credit union in NH or anywhere else I lived, I would be a member of that credit union, not merely a customer. A credit union is a tax-exempt, non-profit organization, so the profits go back to the members. This means lower interest rates and higher dividends. The more depositing members, the greater the benefits for everyone. Most credit unions now offer as many services as banks do with more personalized assistance.

The credit union's board of directors is elected by the members and entrusted with fully representing them in their decisions. The National Credit Union Administration insures credit unions and many are also FDIC insured.

Given these factors, I think I am likely to do my MA banking in a credit union in MA. There are advantages to both banks and credit unions, but for my needs, I prefer the latter.

by: Art Gib

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