Kia McCallister-Young, director of America Saves, joined Cheddar News to explain key differences to consider when making a choice between a credit union and a bank. "You want to do your research and know exactly how to gain membership to a credit union," she said, "but, again, banks often are able to be more accessible and be in neighborhoods."

Closing Bell

Stretching Your Dollar: When to Opt for a Credit Union Vs. Bank

It is time for stretching your dollar where we give you changeable tips to help you make the most of your money. And today we're going to break down a banks versus credit unions a timely topic. You might think that a bank is your only option for keeping your money safe or for getting a credit card. But that's actually not true. Credit unions are another viable option, but there are of course some key differences to consider when you make the choice. So joining me now is Kia mcallister, Young Director of America Saves and nonprofits seeking to motivate Americans to save more and reduce debt. I like that. Kia, it's great to see you on the show. When should someone offer for a credit union versus a bank? Yeah. So thanks for having me. It's always about being informed of the differences, right? And being able to make the best decision for you and your loved one. So while I can't say that one is better than the other, there are some very clear distinctions between the two. Um So first one is where banks have to answer to their shareholders who are often not their customer credit unions, shareholders are its members or its customers. So what's good for the shareholder is all always good for the members at the credit union. Um And then 61% of credit union members have incomes um that are less than $100,000 annually. Um Nearly 60% of credit union branches are, are in low and moderate income neighborhoods. So when credit unions say they're committed to the financial well being for all they're reaching those of us who are most financially vulnerable, you can also find lower or no cost checking account options usually at a credit union lower interest rate. Um and you're able to gain membership through what um what we have in common. So your employers, social groups, faith organizations, and sometimes even your geographic location. Interesting. Uh so Kia in the wake of these bank collapses that we saw a few weeks ago and I still obviously questions about um the banking sector, what happens from here? Um At least in the near to short term uh near to medium term, I guess you could say, do you think that might cause more people to look at a credit union? Would that be reasonable? Absolutely. I mean, I feel like it's always reasonable to, to check and see what your banks and, and credit unions have to offer. Um It's never a bad idea to shop and make sure that you're getting um the best support and, and offers. Um and products available to you? Mhm. What about convenience? Um, obviously that's a factor here and in this digital world, I think people want to have the ability to access their funds in person if for whatever reason there is an outage or heaven forbid a cyber attack, but also have that digital component as well. What do our viewers need to know about those two different offerings? Yeah, definitely. Do your research. So a lot of times we feel like we don't have access to a certain uh credit union just because of the name. Um but sometimes if you know someone that's at that bank or related to someone that is at that credit union, you can gain membership. Um for instance, Navy Federal Credit Union. Um if you are related to, to a member there, there's a chance that you could um gain membership. So you want to do your research and make sure you know exactly how you can gain membership to credit unions. But again, banks often are able to have uh to be more accessible and be, you know, in neighborhoods. So doing your research and knowing what's available to you is really key there. Uh Kia very quickly, we just have about 30 seconds left. What do people need to know about uh yield that they would be getting their return on savings greater at a bank. The savings account or a credit union always do your research. Definitely. Um But, and, and make sure because it, it changes based on the, the um organization, the financial institution. So do your research. But um you may be surprised to find that your credit unions give you um better interest rates. Interesting. All right, good to know, especially in this environment, Kia mcallister, Young Director of America Saves and nonprofit seeking to motivate Americans to save more and reduce debt. Our thanks to Kia for that important segment.