How do Banks and Credit Unions Differ?

At one time, credit unions specialized primarily in low-interest loans and savings accounts, but not other services. But most have increased their range of services offered, with many now offering checking accounts, credit cards, student loans and mortgages. Some people opt to maintain savings accounts with credit unions, since they tend to offer higher interest rates and a checking account with a traditional bank to ensure they have greater accessibility to ATMs and more. Deciding which type of institution will work best for you is a personal choice.

Opening the Right Checking Account For You

Once you've decided on a specific bank or credit union, you'll want to open a checking account. A good checking account is an essential tool for building solid personal finances. It makes managing your money easier and over time it will save you money.

Most banks and credit unions offer a variety of checking account options. Some are free and others carry a monthly fee. Often the free checking account requires that a minimum balance be maintained.

Pay particularly close attention to the additional fees that a bank may charge. The charges are generally small−from 10 cents to several dollars, but they add up. Here are some of the most common fees:

• Check Fees. Banks can sometimes charge a small fee for each check
        you write. Some banks may allow you to write checks for free up to
        a set amount per month. After which fees may occur for every
        check written above that set amount.

• ATM Fees. If you withdraw cash from an ATM outside of the bank’s
        system, your bank may charge you for those withdraws. Other
        banks may even charge you for not being one of their customers.

• Overdraft Fees. Banks charge customers who withdraw money from
        an ATM or make a debit card purchase that exceeds the account
        balance. By law you must grant the bank permission to charge you
        overdraft fees.

• Checking accounts can also earn you money. Some offer interest,
        just like savings accounts. These can be particularly beneficial if you
        plan on maintaining a large balance.