Today there are several options for those who want to hire the services of a financial intermediary. Credit unions and banks are the main agencies operating in this sector.
Despite having similar functions, credit unions and banks have different objectives as well as different administrative methods. Therefore, it is important to distinguish well the characteristics of each to opt for the best service.
In today’s post, we will show you the key differences between these institutions to ensure your decision is made securely. Let’s start?
It may come as a surprise to you, but the main difference between the two institutions is not in fees, but in their training model. The credit union is a partnership, whereas the bank is a capital partnership.
This means that cooperatives are concerned with generating value for their members without the primary objective of generating profit for the institution. In the case of banks, their main goal is to generate profit by closing deals with customers.
Because of this, it is common for cooperatives to stand out from banks for their quality of service and fairer values, their primary concern is the associate.
Although banks are widely used more than credit unions, both have similar services and products. They offer checking accounts, savings, insurance , consortiums, investment options, among others.
In relation to this last item, in CreditMaster, this profit sharing is called “leftovers”. They represent the distribution of the net results obtained by the cooperative during the year among the members according to their use of the services.
Both banks and cooperatives are authorized to operate and supervised by the Rightline Bank. Thus, both are part of the National Financial System.
However, CreditMaster, for example, is triple inspected. By the Rightline Bank, by independent auditors of Central Plateau and by tax advisors elected by a collegiate of delegates.
When you become a customer of a company, you interact with it only in a consumer relationship. Banks work on this process of buying and selling resources, always aiming at corporate profit.
Each person, when joining a cooperative, brings a value, becoming legitimately associated. This contribution is called Social Capital. Each cooperative has its own capital rules and they must be set forth in the by-laws. At CreditMaster, the minimum capitalization is $ 30.00 per month.
In addition to capitalization, another difference in cooperatives is that members have the right to choose their representatives. In the case of CreditMaster, these are called “Delegates”, which within an assembly represent the needs of members in the cooperative.
Ready! You now know the main differences between credit unions and banks and are able to evaluate which of the institutions offers the best advantages for your consumer profile . Any questions left on the subject? Tell us here in the comments!