It's Your Money: Banks vs. credit unions - WKOW 27: Madison, WI Breaking News, Weather and Sports

It's Your Money: Banks vs. credit unions


MADISON (WKOW) -- After the recent government takeover of a bank in California, there's understandable concern among many other people - Is their money safe?

In tonight's It's Your Money report, we compare the two main places for keeping your money: banks and credit unions.

Banks and credit unions.   In the past, you could tell them apart easily.   Today, not so much.

"The differences are less obvious than they used to be," UW Extension Specialist Michael Gutter says.  "Deregulation over the past several years has changed the services they provide."

University of Wisconsin Extension Financial Specialist Michael Gutter says the principle difference that still exists is that banks are for-profit businesses that answer to shareholders and credit unions are non-profit institutions that answer to their members.

"Some are going to have a very friendly feel to them, others more commerical," Gutter says.  "Whether credit unions or banks.   And I think people should try one of each when shopping around and find which they're more comfortable with."

Gutter says there's one crucial question you need to answer as you shop for a new place to keep your money.

"The first thing is to figure out what you need rather than what they have," Gutter says.

Depending on your needs, Gutter says you may find the best deal at the institution that meets most, if not all of them.

"You'll have checking, savings, mortgags, lending; a lot of them will provide a lot of the same services," Gutter says.  "Since credit unions are membership-based, those with very small memberships may be more limited."

But credit unions are not for everyone.   Some experts say wealthier people are better off at a bank, or even a brokerage house, where there are more investment options and oversight.

And as far as the membership requirement, credit unions are much less limited than they used to be, so as you shop around, don't be afraid to ask and negociate for what you want, whether it's membership or perks.

"I've certainly found from my own experience that even when I thought no one would budge on this, they did," Gutter says.  "You have to keep your confident and be willing to walk away.   And if you're willing to do that, then you have nothing to lose."

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