Question

What are the differences between a bank, a savings and loan association, and a credit union? What are the benefits you could receive from each? Where would you expect to find the best loan values? Please give complete answers in full sentences with examples and explanations

Answer 1

Bank, savings and loan association and credit union are all institutions provided for investing, saving and borrowing money. A commercial bank is a for-profit organization that deposits money and pays interest on it and lends money and collects interest on it. Some of them even allow their customers to invest in stocks through their brokerage divisions. They also provide services in managing the business and personal trusts.

Saving and loan associations offer services of a commercial bank and specialise in business and personal loans. They are mutual owned by their depositors or issue the stock which is publicly traded. Credit Unions are non-profit cooperatively-owned institutions which make them different from commercial banks. The account holders deposit money in the credit unions which is considered as members buying shares in the unions. Like the shareholders, these members receive dividends from the earning of credit unions. These usually offer a better rate of interest on deposits and charge lesser interest on loans than commercial institutions.  

For the purpose of investing, commercial banks are safer with less risk. They offer wider services with more branches and ATM for instant money withdrawal. In a credit union, the customers are considered members thus they are given high priority in services and benefits offered. For loan services, commercial banks act in a bureaucratic manner whereas credit unions provide better cushion for borrowers. The interest charged on loans by credit unions is also lesser than the commercial banks.