Ask Stacy: Which Are Best — Banks or Credit Unions?

Advertising Disclosure: When you buy something by clicking links on our site, we may earn a small commission, but it never affects the products or services we recommend.

SeeSaw Piggy Banks
ullrich /

Welcome to “Ask Stacy,” a short video feature answering money questions submitted by readers and viewers. You can learn how to send in a question of your own below.

If you’re not typically a video watcher, give it a try. These videos are short and painless, and you’ll learn something valuable. But if you can’t deal with video, no problem: Just scroll down this page for the full transcript of the video, as well as some reader resources.

Today’s question is about which are best, banks or credit unions.

I can remember a time when joining a credit union meant jumping through hoops. You had to work for a specific company, serve in the military or be a member of some group or other. These days, finding a credit union is much simpler. Many credit unions now can and do accept just about anyone.

But is a credit union for you? Here’s what I think.

For more information on this topic, check out “How to Pick the Best Credit Union for You” and “5 Simple Steps to Painlessly Switch Banks.” You can also go to the search at the top of this page, put in the words “credit union” and find plenty of information on just about everything relating to this topic.

Got a question of your own to ask? Scroll down past the transcript.

Don’t want to watch? Here’s what I said in the video

Hello, everyone, and welcome to your money Q&A question of the day! I’m your host, Stacy Johnson, and this question is brought to you by, the best in personal finance news and advice since 1991.

Today’s question comes from Ang. Ang says, “Which is best: banks or credit unions?” Well, Ang, this one’s pretty easy. The short answer is that credit unions are better overall. Are there exceptions? Sure. But let’s go over a few things.

First, the reason I can say that credit unions are typically better than banks is because they are nonprofit. That means that, unlike a bank, which is formed to make as much money as possible, a credit union is there for the benefit of its members.

Why does that matter? Because when you’re not trying to make a profit, you can pay more on your savings accounts and you can charge less on your loans. So, if you’re a customer of a credit union, you’re often going to find lower rates on loans and higher rates on savings. And since they’re smaller than the big boys, you might also find more personal service.

One negative often associated with credit unions is convenience. Generally speaking, credit unions are local. So, what happens if you’re from Florida and you need to withdraw money in Colorado?

While that may seem like a drawback, it’s often not.

Most credit unions participate in what’s called a shared branching network. That means they basically share their branches. So, I can go a completely different credit union’s branch in Colorado and access my Florida credit union account. Pretty cool, huh? You can also use ATMs all over the country. Some are even in 7-Elevens! (You can see the 30,000 ATMs and 5,000 participating branches here.)

That’s the good stuff. What about the bad? There can be some minor drawbacks to credit unions, depending on what you’re looking for. For example, credit unions may have fewer bells and whistles when it comes to things like reward points on credit and debit cards. If that kind of stuff is important to you, you might want to shop those services.

Which brings me to my last point. Before switching banks, or many other services, start by writing down exactly what you’re looking for. Do you want a vast ATM network? Do you want better savings rates? Do you want lower loan rates? In other words, figure out what you need, then compare services.

I hope that answers your question, Ang. We’ve got a lot more info on this topic at Just do a search for “credit unions.”

And now let’s close today with a quote from comedian Groucho Marx.

“While money can’t buy happiness, it certainly lets you choose your own form of misery.”

That’s all I’ve got for today, guys. Make it a profitable day, and meet me here next time!

Got a question you’d like answered?

You can ask a question simply by hitting “reply” to our email newsletter, just as you would any email in your inbox. If you’re not subscribed, fix that right now by clicking here. It’s free, only takes a few seconds, and will get you valuable information every day!

The questions I’m likeliest to answer are those that will interest other readers. In other words, don’t ask for super-specific advice that applies only to you. And if I don’t get to your question, promise not to hate me. I do my best, but I get a lot more questions than I have time to answer.

About me

I founded Money Talks News in 1991. I’m a CPA, and have also earned licenses in stocks, commodities, options principal, mutual funds, life insurance, securities supervisor and real estate.

Got any words of wisdom you can offer on today’s question? Share your knowledge and experiences on our Facebook page. And if you find this information useful, please share it!

Got more money questions? Browse lots more Ask Stacy answers here.

Get smarter with your money!

Want the best money-news and tips to help you make more and spend less? Then sign up for the free Money Talks Newsletter to receive daily updates of personal finance news and advice, delivered straight to your inbox. Sign up for our free newsletter today.