Why More People Are Considering Credit Unions as Their Primary Bank

September 21, 2021 by Chevron Federal Credit Union

If you could earn markedly more on the money you save and be charged appreciably less interest for a loan, you’d want to, right? Indeed, the answer is kind of a no-brainer. And it’s also exactly what a credit union can typically deliver versus a traditional bank.

The fact is, credit unions and banks differ in a lot of important ways. But making your money work harder for you is an essential difference that matters.

Key credit union differentiators

Member-driven structure. Banks are generally for-profit businesses that must serve both stockholders and customers. Credit unions are instead not-for-profit financial organizations that exist to serve their member-owners. That’s right. When you deposit money into a credit union savings account, you become both a member and a part-owner.

And while banks must pay profits to outside stockholders, credit unions return their profits to their member-owners in the form of more attractive rates and reduced fees.

Cooperative foundation. Members of a credit union share a common bond, also known as its “field of membership.” So, when you join a credit union, your fellow members may work for the same employer, be a part of your family, live in a particular area or belong to a specific group.

What’s more, unlike a bank that’s governed by a slate of salaried executives, a credit union is managed by a volunteer board of directors that’s elected by members. And because they’re a part of the communities they serve, credit unions emphasize local and personal connections.

The bottom line: These fundamental distinctions are the guiding principles behind every service and product that credit unions offer their members. Want some proof? Here are a few ways your credit union provides high-value benefits that are meaningful to your personal finances.

3 Reasons to make a credit union your primary bank

#1 Lower interest rates on loans

The ability to offer more competitive rates and terms on lending products is a hallmark of credit unions. The National Credit Union Administration (NCUA), analyzing data from S&P Global Market Intelligence, regularly compares national interest rates for loans from banks versus credit unions. The latest 2021 data shows that credit unions offer consistently lower interest rates on every type of mortgage loan, new and used car loan, home equity loan and personal loan — in some cases, more than 2.2% less!

Moreover, loan rates currently offered by Chevron FCU beat these national averages.

#2 Higher dividends on savings

Because credit unions serve their members and not investors, they can also offer higher interest rates on savings accounts — an important plus when it comes to helping your money grow. Since banks aim to make a profit, they commonly set lower interest rates on savings and higher interest for loans. Here again, a sampling of evidence from the most recent NCUA quarterly data shows that average credit union savings rates outpace banks in every savings category, from CDs to money market accounts.

Currently available share savings rates offered by Chevron FCU also come in higher than these national averages.

#3 Guaranteed insurance that protects your money

It’s a lingering misconception that credit unions don’t provide the same level of deposit protection as their big-bank counterparts. That’s a myth. The truth is, credit unions do guarantee the same amount of federally-backed deposit insurance — it’s just a different U.S. government agency that oversees it.

Shares in your credit union deposit accounts are federally insured by the National Credit Union Share Insurance Fund (NCUSIF), which is an arm of the NCUA. This guaranteed backing protects at least $250,000 per individual depositor, per account category. Banks are federally insured through the Federal Deposit Insurance Corp. for the same per-depositor, per-account amounts.

Here’s a lesser-known strategy to maximize insurance: For single-owner accounts, the maximum amount of coverage is $250,000. So, if you have multiple accounts at the same credit union, your deposits are insured for the sum of those funds up to $250,000. The nuance is that individually titled accounts — say, one with your partner’s name, your joint account and one named for your children — will each be backed up to the maximum amount of coverage.

Credit unions evolve to support your financial goals

The cooperative structure of credit unions supports a cycle of mutual assistance with a common goal of financial success for all members. Along with more effective ways to save and borrow, credit unions are also:

  • Investing in wider ATM and CO-OP Shared Branch networks
  • Working with trusted estate planning, insurance, home and travel partners to offer members additional benefits and
  • Expanding digital money management tools. Chevron FCU members, for example, get free access to MX Money Management, an all-in-one personal finance solution that can link all your financial accounts — even credit cards and accounts at other financial institutions. With a single, interactive view that unites your budgets, spending, transactions, net worth and goals, there’s no need for a calculator or number crunching. You can find the MX Money Management tool once you log into on-line banking.


From everyday finance to life’s big money moments, it’s better when you belong.