Can I get better interest rates at a credit union?

Can I get better interest rates at a credit union?

Mitchell Freedman, CPA/PFS (CEO, MFAC Financial Advisors) gives expert video advice on: What kinds of bank accounts should I have?; How do I open a bank account?; How can I compare banks and the services they offer? and more...

While there is no rule of thumb that a credit union will either provide higher returns or charge a lower rate of interest, there can be situations where they do pay higher rates and they do have lower interest requirements on loans. The reason for it is quite simple. Since the credit unions are there for the benefit of the members; the depositors of members, and those members are not depositing for the purpose of earning a profit but for getting financial services. However, traditional banks have a requirement to make a profit so that they can pay dividends to their shareholders. So, that difference alone often gives customers of credit unions the opportunity to get advantages, not huge advantages, but when you're talking about interest rates, either whether you're receiving a higher rate or paying a lower rate, even small amounts compounded over intermediate periods of time can have significant effects.