Credit unions are also the clear leaders when it comes to overdraft fees, which average $28.20 at credit unions and $33.38 at banks.
“Credit unions have a much higher instance of free checking, much lower fees and much lower thresholds to avoid a fee,” Greg McBride, CFA and Bankrate’s chief financial analyst, said in a statement. “Credit unions should absolutely be included in your search for an institution as a price-sensitive consumer.”
An area where credit unions align very closely with banks is ATM surcharges. Ninety-two percent of the credit unions in Bankrate’s survey charge non-members who use their ATMs, versus 99 percent of banks. The most common fee for each type of financial institution is $3.
There’s also a separate ATM fee that many institutions charge their own customers who use out-of-network ATMs. This is typically $1.50 at credit unions and $2.50 at banks. Thirty-six percent of credit unions offer their members at least one free out-of-network withdrawal per week, while 30 percent of banks do the same.
Still, although credit unions have many advantages, McBride says, “There is no one-size-fits-all institution.”
He adds that consumers should also be savvy and not expect one institution to serve all of their needs. For instance, you can open a no-fee checking account at a credit union while maintaining your high-yield savings account at an online bank.
“I’d remind consumers that it doesn’t have to be an all or nothing strategy,” said McBride. “It often pays to be a free agent.”
