Big banks like Wells Fargo, Bank of America, and Chase have one thing in common: you can find one within walking distance almost anywhere you are in the country. However, while these financial behemoths make banking convenient, they can’t compete with the best APRs and lack of fees that many credit unions offer.
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“Credit unions are non-profit organizations, while banks are for-profit organizations,” said Andrew Lokenauth, chief financial officer and personal finance expert. “Because credit unions are non-profit, they are taxed less than banks, so their fees and lending rates tend to be lower than banks, and interest earned on savings accounts tend to be higher for customers than in banks. Credit unions offer some of the lowest and best rates on credit products such as credit cards, auto loans, and mortgages because they are nonprofit organizations.
Here are five credit unions to consider if you’re looking for financial products and services that are more competitive than those offered by the big banks.
Federal Naval Credit Union
“In my opinion, the biggest and best credit union is Navy Federal,” said Corey Noyes, financial advisor and owner of Balanced capital. GOBankingRates agrees. That’s why it ranked NFCU as the #1 credit union on its list of Best Credit Unions of 2022.
Noyes pointed out that if you can become a member of the Navy Federal Credit Union, you’ll get lower interest rates on loans and higher rates on deposits. For example, Navy Federal offers 0.25% APY on its savings account, while major banks, such as Wells Fargo and Bank of America, offer a much lower standard savings rate of 0.01% APY. And while NFCU offers new auto financing as low as 1.79% APR, Bank of America’s lowest rate is 2.49% APR.
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Eastman Credit Union
One of the reasons Eastman Credit Union stands out is its Beyond Free checking account, which has no monthly service fees or minimum balance requirements — common things at major banks. Eastman also offers far more competitive rates than the big banks offer.
For example, Eastman Credit Union’s savings account offers 0.55% APY, which exceeds the 0.01% APY offered at many major banks. Additionally, the credit union also offers an APY of 1.10% on a five-year CD, while Chase’s best rate on a five-year CD is 0.05% APY. Eastman Credit Union also offers personal loans, unlike Chase.
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Alliant Credit Union
“There are several reasons why Alliant Credit Union may be a better choice than the big banks,” said Andrew Bryant, personal finance expert and founder of Credit solder. “For starters, Alliant is a non-profit credit union, which means all of its profits are returned to its members in the form of better rates and lower fees.”
Bryant also pointed out that Alliant has no hidden fees and offers free checking and savings accounts. Major banks are known to charge fees on checking accounts. For example, Chase charges monthly maintenance fees of up to $35.
“Another advantage Alliant has over the big banks is its community focus,” Bryant said. “Alliant partners with local organizations to help promote financial education and empowerment in underserved communities.”
Alliant Credit Union’s High Rate Savings Account, which offers 0.55% APY, far exceeds the standard savings rates offered by many major banks, such as Chase, which offers 0.01% APY. Alliant also offers a high-rate checking account that offers 0.25%, while Chase’s interest-bearing checking accounts only offer 0.01% APY. Additionally, Alliant offers up to 0.80% APY on CDs, while Chase only offers 0.01% to 0.05% APY on its CDs.
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American Airlines Federal Credit Union
American Airlines Federal Credit Union stands out for the 0.30% APY it offers on its main savings account, which is very competitive considering the 0.01% APY savings rate offered by Chase, Wells Fargo and Bank of America.
The credit union is also offering 0.70% APY on its five-year Dream Plan stock certificate, which beats CD rates offered at the nation’s largest banks. For example, Chase offers up to 0.05% APY, Wells Fargo offers up to 0.02% APY, and Bank of America offers up to 0.05%. American Airlines Federal Credit Union also offers personal loans, unlike major banks such as Bank of America and Chase.
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Patelco Credit Union
The Patelco Credit Union account that sits well above what the big banks offer is its Money Market Select account. Major banks, such as Chase, Wells Fargo and Bank of America, do not offer money market accounts. And Patelco’s Money Market Account offers a competitive APY of 1.00% on the first $2,000; it then pays a blended interest rate on balances over $2,000. You can see how it works using Patelco Money Market Calculator.
Patelco is also offering up to 0.70% APY on its certificates of deposit, which beat the rates offered by three of the country’s biggest banks. And like other credit unions listed here, Patelco offers personal loans, which is another area where many big banks can’t compete.
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