Recent bank collapses have been unsettling for banking customers nationwide. While the Federal Deposit Insurance Corporation quickly moved to protect depositors, many people continued to wonder what would happen next.

If you’ve been worried about your own money, rest assured that your deposit accounts — like those recently protected by the FDIC — are insured. But it’s important to know who you’re banking with. Credit unions, like Spectrum Credit Union, operate differently than banks. Here are some of the key facts (and benefits) to know:

A not-for-profit institution  

Credit unions operate under the not-for-profit model. The purpose of a credit union is to provide financial services to its members, and any profits made are reinvested back into the credit union to benefit its members.

Banks operate under a for-profit model. A bank is owned by shareholders who expect to receive a return on their investment. Any profits made by the bank are distributed to shareholders in the form of dividends.

Insurance-backed deposits

Deposits in both banks and credit unions are insured — up to a certain limit. The difference comes down to which government agency provides oversight.

The Federal Deposit Insurance Corporation (FDIC) is an independent federal agency that provides deposit insurance to banks to protect depositors in case their bank fails. Currently, the insurance limit is $250,000 per depositor, per account ownership category, per insured institution. The FDIC also supervises and regulates certain financial institutions.

The National Credit Union Administration (NCUA) is an independent federal agency that charters, regulates and insures federal credit unions. Like the FDIC, the NCUA provides deposit insurance to protect depositors. The NCUA insures deposits up to the same limit as the FDIC, $250,000 per depositor, per account ownership category, per insured credit union.

Member-driven

At a bank, you’re a customer. When you join a credit union, you become a member-owner. You read that right. As a member of a credit union, you’re also a part-owner.

One of the main advantages of credit union membership is the emphasis on providing personalized service to members. Credit unions are often smaller and more community-oriented than banks, which allows them to develop close relationships with their members and offer tailored financial solutions.

Plus, members of a credit union share a common bond, known as the “field of membership.” Members often live in the same area, work for the same company or go to the same school.

Why choose a credit union?

Because credit unions operate under smaller, not-for-profit models, becoming a member comes with some serious financial perks.

Better savings rates

According to the latest data from the National Credit Union Administration, credit unions offer better rates on savings products — like share certificates and money market accounts.

Lower interest rates

Credit unions also provide lower lending rates. The NCUA found credit unions offered lower rates on every type of mortgage loan, home equity lines of credit, new and used car loans, credit cards and personal loans.

Lower fees

Credit unions offer lower fees on average for checking accounts, savings accounts and share certificates than traditional banks. Additionally, credit unions often have lower or no fees for services such as ATM withdrawals, overdraft protection and wire transfers.

In today's ever-changing and uncertain economic times, you need a financial option that is reliable and trustworthy. At Spectrum Credit Union, you can rest assured that you’re in good hands. If you have any questions — or want to discuss maximizing your NCUA-backed insurance — don’t hesitate to stop by a branch or call us at 800-782-8782.