Do you use a bank or a credit union? Why?
Full episode script
According to the World Bank, Globally, 69 percent of adults have an account, up from 62 percent in 2014 and 51 percent in 2011. Women make up just over half (55%) of unbanked people worldwide. While there’s a LOT of data that is correlational, as the University of Minnesota extension office explains it:
Research indicates that those who own bank accounts are more likely to own other assets including accounts related to savings, credit, and insurance. Consumers without a relationship with a mainstream financial institution also pay high transaction fees for services such as check cashing.
If you do utilize a financial institution, there are differences between the options. In the United States and several other countries — there are banks, and there are credit unions. Both offer a full range of financial services, both offer worldwide access to your money, and both offer money — but that’s where a lot of the similarities end.
Banks are for-profit institutions, and while there are large and small banks, they are, as a group, owned by shareholders with the specific purpose of making a profit. Those profits are funnelled from the wallets of the customers that, more often than not, are paying fees to access their own money to those that own the shares of the bank.
Alternatively, there are credit unions. These institutions offer more than credit, and you don’t have to be a part of a union. Instead, credit unions are not-for-profit and member owned. Rather than existing for the express purpose of profit, they exist for the purpose of serving members with lower loan rates and higher deposit rates. Usually credit unions also put a lot more of their money in to the community and community service.
I fully admit I am biased here. And while I try and keep this podcast as unbiased as possible, I’m just admitting that this situation is one I’m very emotionally close to — partially because for several years, I was unbanked and unable to get a bank account, thanks to a bad report on Chexsystems. It was a credit union that stepped in and helped me get an account — and it’s that same credit union that I work for today in my other life. Where you go for banking services matters — and I’d suggest looking into the option of a not-for-profit credit union that isn’t relying on you to make money for shareholders.
This script may vary from the actual episode transcript.