Here are the 3 times a credit union is better than a bank

When we think of the best place to manage our money, banks are top of mind. But did you know that credit unions could actually offer more value to you as a consumer?

Credit unions, by nature, are member-owned organizations so they know their customers well and, since credit unions are regulated differently from banks, they have more flexibility in the rates they can offer on all sorts of financial products.

Since credit unions are not-for-profit institutions (i.e., their goal isn't to drive up profit for shareholders), they can reward members with features like lower interest rates on loans. Banks, on the other hand, typically have higher interest rates to increase revenue.

First Tech Federal Credit Union, for example, offers the top low-interest credit cards. We recommend always paying off your credit card bill on time and in full every month, but if you know you're going to carry a balance, a card offering low interest makes a big difference in what you'll ultimately owe.

You can become a member of First Tech Federal Credit Union simply by joining the Computer History Museum (CHM) or Financial Fitness Association (FFA). The first year's membership fee for the CHM or FFA is paid by First Tech, and you can cancel your CHM or FFA membership after opening an account with no impact on your credit union membership.

Credit unions' non-profit structure is why they can generally offer higher savings interest, too. Since they don't have so many physical branches, credit unions also have lower operating costs than banks, thus less overhead costs — meaning they can pass on the savings to you.

Digital Federal Credit Union (DCU) currently offers a savings yield over 5% APY, which is above anything you'll find on a high-yield savings account these days. The easiest route to membership is by joining one of the participating organizations DCU works with. The most affordable option is the non-profit organization Reach Out for Schools, where memberships starts at $10.

Other credit union savings accounts we love include the below:

Because credit unions serve their members, they offer more than just favorable rates. Focusing on a community of people, they tend to pride themselves in treating everyone fairly and personalizing service the best they can. This may appear in different ways, whether it's looking beyond just your credit score when approving you for a loan or offering you access to assistance like financial counseling.

Or, in some cases, it means creating a financial product catered to a community of people like you. For instance, Andrews Federal Credit Union offers eligible first-time homebuyers up to $20,000 toward their down payment or closing costs. The money doesn't have to be paid back if they stay in the house for at least five years.

And Navy Federal Credit Union, overall, accommodates military members, veterans and their families. When it comes to mortgages, the credit union offers some of the lowest rates for VA loans on the market.

At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every banking and credit union article is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of banking and credit union products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.

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