Although banks and credit unions serve very similar purposes, they are run entirely differently. Many people make the mistake of using the term “bank” to refer to all types of financial institutions. However, the differences between banks and credit unions are quite vast. They both have their own advantages and disadvantages, which is why it’s important for people to understand their purposes before deciding to use one or the other. |
Credit unions are much more focused on the individual member. They are non-profit organizations that are run by the members of the credit union. A board of directors makes the financial decisions for the institutions, and they are elected by the members of the credit union. Because credit unions work on a non-profit basis, they have much less access to capital, which means that they cannot afford to give out large loans to businesses and individuals. However, they typically offer very low interest rates on credit cards and have low penalty fees.
Banks, on the other hand, are owned and operated by private investors. Banks work as for-profit organizations, which means that they invest and trade money in order to make more money. Because of this, they have access to much more capital. This means that businesses and individuals can typically get approved for higher amounts of loans at banks. A bank in Cincinnati will have more loan money to offer a member because it uses other members’ money for investments. However, interest rates on loans and credit cards are usually higher at banks because they operate on a for-profit basis.
Cheviot Savings Bank (http://cheviotsavings.com) is a bank in Cincinnati offer a large variety of products from checking & savings to mortgage lending and much more.
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