Jessica Quindlen: [00:00:00] Welcome back to the Sound Cents Podcast. I'm Jessica Quindlen. Today we're going to discuss credit unions versus banks. The credit union difference. In case you don't know, Ent is a credit union, and so I wanted to bring one of my wonderful colleagues on to just sort of discuss the differences between credit unions and banks and really what the value of credit unions are.
I have today, Emma Protsik, our Financial Coaching Supervisor. Hello, Emma.
Emma Protsik: Hi, Jess.
Jessica Quindlen: So, it's very exciting because we're recording this beforehand, but this episode will come out after your wedding. So yeah, I'm just going to say a preemptive congratulations, wifey.
Emma Protsik: Aw, thank you.
Jessica Quindlen: You're welcome. All right. So let's just dive right in. What is the difference between credit unions and banks?
Emma Protsik: Credit unions are not-for-profit financial institutions. So that means that our ownership is actually within our members. So those are those individuals that have an account with us or a loan product. The way our profits work, so we do receive profits of course from interest rates, you know, charged on the loans, how we got to operate, we all need to get paid as well.
But any profits above the operational costs go [00:01:00] directly back to our members. That is in the form of lower fees, better returns on savings accounts and lower interest rates.
The one thing to keep in mind with credit unions is there is typically a membership criteria. So, there is a certain demographic, whether that's geological or an employer base that they serve. So, for Ent specifically, you just need to live, work, or worship in the 21 counties that we serve in across the front range in Colorado.
But again, some credit unions are employer-based, so you might work at a school and be able to join that credit union. Just make sure you're doing your research that you're eligible for those with the different criteria that they have.
Jessica Quindlen: Great. And so banks are basically the opposite. They are for profit?
Emma Protsik: Yes.
Jessica Quindlen: And they typically have higher fees and they're just sort of a whole different ballpark there?
Emma Protsik: Absolutely. Yeah. The ownership in banks too, again, I think that's another one of those big differences. For credit unions, it's those folks that have an account with us. For banks, those owners are the shareholders, you know, they are those public [00:02:00] companies. So, one thing to consider with that of course, when we're looking at profits, those would then go to those shareholders in a bank situation.
A great benefit to banks though, they are all over the country. They are open to anyone. They don't have any certain criteria to get those account opens and you'll be able to find a branch in basically any state you travel to.
With credit unions, though, because they are typically more local, we have gotten together. Credit unions work together in a cooperative so you can access your credit union account at a lot of other credit unions around the world. So, you can check with the credit union you're looking into. Maybe you travel to a different state frequently to visit family. You can still have access to your funds. We work together in that way to serve our members.
Jessica Quindlen: I love that. What are some of the benefits of joining a credit union outside of what we've already discussed? You know, being a member, having lower fees and better rates. What are some of the other benefits?
Emma Protsik: I think my personal favorite benefit that credit unions really have is just that people helping people [00:03:00] philosophy. It's really embedded in all that we do. Credit unions have a very heavy community involvement, whether that's volunteering or donation based. We are all about the communities that we serve.
There's also a lot of great free resources. Credit unions really take ownership on that financial education piece, whether that's just articles on a website, programs like financial coaching even offering different financial education classes. Check out our Education Center.
Jessica Quindlen: I love that. And we'll of course link all of ours in the show notes of this episode. What about you know, that real community involvement, like, yes, people helping people, but you know, your experience in credit unions. You've been with Ent for six years?
Emma Protsik: Yep, six years.
Jessica Quindlen: How do you sort of see that difference?
Emma Protsik: I not only work at Ent, I am also a member myself. But that member service piece and just the overall support. Again, with a credit union, it is typically going to be smaller staff size. You’ll work together a little bit more closely. They're community based. They know what you're experiencing, but [00:04:00] with that member-centric service that credit unions offer, they really take the time to get to know you, understand where you're at financially and where you would like to be.
Jessica Quindlen: I love that. What are some tips for someone who might be choosing between a credit union and a bank?
Emma Protsik: Want to just preface, there is nothing wrong with either option. Again, we all have our own preferences and what we're needing, so that's where that research piece really comes in.
Jessica Quindlen: And frankly, you can both. I mean, I have a bank account and a credit union. I'm a member of Ent as well. So also, you do not necessarily have to choose.
Emma Protsik: Yes, you do not need to stick to one. It's again, just all about doing that research. Making sure you're looking at those fees is a major part when you're looking at those deposit accounts, like savings or checking.
Are there minimum balances that you have to maintain? Will you be able to do that? Looking at interest rates, of course, is a benefit if you're looking at those saving products. You want to get the higher interest rate or, of course, if you're looking to take out a loan, you'll want something lower.
Bringing it back to what we were talking about again, it is based [00:05:00] on your personal preferences and I would even say your values. You know, make sure that you're supporting an organization and working with an organization that you feel proud of.
And I always like to tell folks when they're doing their research, trying to figure out which they prefer. I think a lot of us when we think about banks or credit unions, it's really just the place that we send our paycheck to, right? It's those deposit accounts. It's where the debit card is. But creating a relationship with the financial institution is extremely beneficial.
When you think of the big picture, again, if you open up that account it might be that place that you're getting your mortgage with because they already have your information. They know you as an individual. So I would just consider that bigger picture. Think about those long-term goals. Again, you have your mortgage there, maybe it's even your retirement savings, different loan products throughout your life.
Getting that relationship established is really important to work towards your financial goals.
Jessica Quindlen: That brings us to the end of our show, Emma. Thank you so much for being here.
Emma Protsik: Thank you, Jess.
Jessica Quindlen: Thank you for listening to Sound Cents from Ent Credit Union. Be sure to follow our [00:06:00] podcast as well as rate and review us. I'm Jessica Quinlan. I will see you next week. Same time, same place.
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