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Checking Account Comparison: Banks versus Credit Unions

Checking accounts are designed to help people manage their money. But did you know, checking accounts offered by credit unions and banks are sometimes worlds apart?
Checking Account Comparison: Banks versus Credit Unions

Checking accounts are simple, timesaving accounts designed to help people manage their money and transact financial business. It’s safer than carrying cash and documents when someone makes a payment. However, even though they go by the same names, checking accounts offered by credit unions and banks are sometimes worlds apart.

The main difference comes down to the end goals of the institution. Banks are businesses with a very specific purpose: to make money for their shareholders. One way they do this is by charging higher and more frequent fees.

On the other hand, credit unions are not-for-profit financial cooperatives that exist to improve the financial lives of their members. At the end of the day, they provide exemplary service to their members, and believe that an excess of fees would counter their mission.


  • Most banks rely on fee income from checking accounts. A typical bank fee can be upwards of $35.
  • To avoid these fees, banks often have high balance requirements or ask consumers for consistent, monthly direct deposit.
  • Banks tend to complicate checking accounts. They offer 3 or 4 different types of checking accounts, each with unique features and fees. Some might have no fees, but limit the amount of transactions you can do. Others might require you to keep $2,000 in your account in order to avoid fees. It’s difficult to find a free account that doesn’t have rigid stipulations.
  • Banks try to keep you loyal by offering free ATMs at their branches. They typically do not belong to an ATM network, and charge fees for any withdrawal not made at one of their branches.
  • Banks have the benefit of offering customizable checks, which allow you to choose the design. However, all checks at the bank, from basic to custom, cost a significant amount to order.
  • Banks attempt to limit your transfers between your accounts by assessing service fees and transfer limits.

Credit Unions

  • Fees charged by Credit Unions are few and far between. Typically they are assessed for NSF (non-sufficient funds) checks and overdrafts. Additionally, they are not as high as banking fees.
  • Many Credit Union checking accounts do not have a minimum balance requirement or insist on direct deposit in order to avoid fees.
  • While Credit Unions may have a few different types of checking accounts, most offer a simple, easy to use, and extremely cost effective basic checking account.
  • Credit Unions may not have as many branches as the local bank so many are partnered with a surcharge-free ATM network. Allpoint is one example with over 55,000 surcharge-free ATMs.
  • Like Banks, Credit Unions can offer customizable checks which members can purchase but most free checking accounts offer basic checks to their members at no charge.
  • Many of the electronic services associated with a checking account at a credit union are free such as e-statements, online, mobile banking and bill pay.

While the services may be the same, the cost of a Credit Union Checking Account can be much less than the same account at your local bank. Free Checking Accounts are just one way Credit Unions save their members money and help them achieve their financial goals.

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