With so many changes in banking due to mergers and acquisitions, now may be a good time to review your financial relationships in your business. We hear often, what is the difference between a bank and a credit union and how does that benefit my business?
The general distinction between credit unions and banks revolves around their ownership and mission. While banks are for-profit institutions run for the benefit of their shareholders (owners), credit unions are non-profit cooperatives owned and operated for the benefit of their members. Decisions regarding new products, services, and benefits come from the needs of members. Being a member of the credit union gives you a vote in how the credit union is managed. Any profit the credit union generates is paid out to members in the form of dividends, keeping your money local and offering you a return on your deposits you typically don’t receive at a large bank.
One of the most important things businesses tell us is they like the fact that we tend to provide them with a higher level of customer service than their traditional bank. In fact, for well over 20 years, customer satisfaction has ranked higher with credit unions than large banks. Many surveys find that credit unions are the most trusted segment amongst financial institutions. At First Commonwealth Federal Credit Union your business services officer will work closely with you to better understand your business and what we can provide to help your business succeed.
In general credit unions will have lower fees than what you find at traditional banks. Take for instance pre-payment penalties on business loans. It is industry practice for banks to charge pre-payments penalties if you pay your loan off early. At First Commonwealth we are not permitted to charge pre-payment penalties as those penalties only serve to make the institution whole for lost earnings. Another example would be for Remote Deposit Services. Typical monthly fees for remote deposit at large banks can range from $35-$50 per month. First Commonwealth monthly fee is $25. (There are just two ways a credit union might benefit your small business.) Contact us today at 610.997.6381 or email@example.com to discuss even more.