Savings Accounts from Banks & Credit Unions
At first glance, banks and credit unions may seem very similar. Both offer savings accounts, credit cards, transaction accounts, term deposits, commercial loans, business insurance, health insurance, and other similar financial products. However, banks and credit cards are fundamentally different: banks are for-profit companies that are owned by its shareholders, while credit unions are non-profit organisations that are owned by its members.
You may consider taking out a savings account with:
- Bank Of Melbourne
- Bank Of Queensland
- Bendigo Bank
- Commonwealth Bank
- Community First Credit Union
- ING Direct
- Macquarie Bank
- ME Bank
- NAB (National Australia Bank)
- People's Choice Credit Union
- Rural Bank
- St George Bank
- Suncorp Bank
- Virgin Money
- Westpac Bank
Because of these basic differences, each one has its own sets of advantages, particularly when opening a savings account. Today, we’ll compare the advantages between these two financial institutions.
Here are the advantages of opening a savings account at a bank:
ConvenienceOne of the advantages that major banks have is convenience. Since a bank has more facilities overall, it's much more convenient for its customers. Banks have more branches and ATMs, which mean it's easier to find one and do your transactions there—even when you're abroad. Furthermore, banks typically have more products and services under one roof so you won't have to look anyplace else.
Robust online servicesSince major banks have the financial muscle to afford cutting edge technology and infrastructure, their online banking usually have more features. Aside from common options like bills payment, online statements, and transaction histories, some banks have online tools that allow customers to track their spending, set financial goals, and categorise expenses. There are even smartphone apps that let you deposit cheques by just taking a photo.
Open eligibilitySome credit unions have specific membership requirements. For instance, a company may have its own credit union and those not part of it can't join. Banks, on the other hand, are available to everyone. In fact, some accounts don't even require a deposit.
24-7 customer serviceBanks have 24-hour customer service, which is really helpful if you come across an emergency after office hours, weekends, or holidays (e.g. your debit card gets stuck in the ATM, you lose your ATM card).
In contrast, here are the advantages of opening a savings account at a Credit Union:
Higher interest ratesSince credit unions are established for the benefit of its members, their interest rates are usually higher when it comes to financial products like savings accounts, term deposits, checking accounts, and money market accounts.
Lower feesIt's also common to see credit unions having fewer and lower fees than banks. For instance, there are many credit unions that offer checks, electronic transactions, and withdrawals at no cost. Naturally, you'd still be charged for overdraft and bounced cheques, but the fee is usually smaller.
Lower balance requirementsIt's not just the fees that are lower in credit unions; even the balance requirements—if any—are mainly lower than those in banks. That means if you have money stashed in a credit union, you won't have to worry over keeping your deposit at a certain amount.
Personalised customer serviceCredit unions are known to provide more personalised customer service than banks. It's common to hear stories of people walking into a credit union and seeing a difference when it comes to ambiance. Tellers recall people not only by name, but recognise customers on sight as well. That's because many credit unions assign one person to work with you, so if you visit often, you develop a working relationship with the same person.