While the differences between banks and credit unions are large, it's often the case that our day-to-day experiences with both are pretty similar. While many people are losing faith in the big banks and their corporate interests, it's true that credit unions often can't compare in terms of technology, speed or convenience. So how do you choose?
Remember that all of these institutions are offering a service. Your needs should come first and foremost in making this decision, and you should feel comfortable making a change at any time to fit your needs. Best of all, you can always choose to split your accounts between multiple institutions.
Credit unions concentrate on savings and offer higher rates of return on both savings accounts and more complex savings products, like money markets and CDs. Thus, you could choose to keep your emergency savings fund and longer-term savings in a credit union, while still using a bank for your day-to-day checking and cash needs.
Often, you can even link your accounts, making it easier to transfer money out of checking and into a higher-rate credit union share account. By forming a relationship with the credit union and showing a stable account, you'll be able to secure better loan rates down the road. Of course, if you think you'll need overdraft protection on your checking account, you'd be better off keeping both savings and checking with the same bank.
Overall, the main question you should ask is what your current needs are. Are you living paycheck to paycheck? Many of us are, and for that reason, it could make more sense to simplify and go with a large bank that can quickly respond to your needs. If you're trying to keep up with your savings -- as we all should be -- it may make more sense to "pay yourself first" by using a share account that's not as easy to get to. But if your income is stable and your spending doesn't really fluctuate from month to month, a credit union is your best option for watching your balance continue to grow.