Why are credit unions so much safer than banks?

[headingnorth]

For a bank or CU anything more than 3 or 4% is risky or a scam. I would rather have decent but safe returns than higher returns but more risk.
Anything more than that then the bank is doing very risky or shady activities with your money to give you those big returns.

What do you even consider to be high yield, 8%? 12%? You are smoking something good if you think you can get those kind of returns from a bank without extreme risk.
No need to get into bitcoin or stock market if you can get those kind of returns from a simple bank account!

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[kryptqnick]

I love that credit unions are non-profitable organizations, and it makes sense to me that some can view a non-profit more trustworthy than a for-profit. I've also read about the pros and cons of both options in this Forbes article, and it seems that credit unions do have a lot to offer compared to banks. They are also often viewed as safer than banks. But I suppose it really depends on a country because I don't think credit unions are common in mine, and even if they exist, nobody would trust them because the whole credit and loaning system in my country is very risky.

[Sanitough]

Credit unions are safer than banks because they are for non-profit cooperative which only caters small scope of investors and members and take fewer risks, unlike banks that are huge and cater most of the big time investors and so the chance to collapse is high. While credit unions can be more trusting and reliable, banks are often considered to be more at a higher risk which makes it highly susceptible to fraudulent scams which eventually put the banks at a compromise causing it to collapse in the end.

[tread93]

Honestly thats not a bad play at all man. Credit unions are smaller and probably less prone to scam. They are all covered by the same FDIC 250k guarantee as well. I like the credit union that I use I should go there more often.

[adaseb]

Banks and credit unions sound the same but they are very different.

Like mentioned above banks are private businesses and their main goal to to generate tons of income for investors. Credit unions are mostly not that competitive and if they make a profit they generally give back to the community or their account holders.

Many people stick with banks because they think they are safer but that isn’t necessary true.

[Victorik]

That's the issue with banks, they can wake up one day and cook up stories of been bankrupt, meanwhile they have been using their profits to maintain the expensive lifestyle of their executive. Banks shouldn't have any reason for going bankrupt considering the amount of profits they make year in and year out.

[harapan]

I believe credit unions are actually non-profit organizations, while banks are for-profit corporations.  So banks are gonna take bigger risks with people's money because their goal is profit.

Basically credit unions' goal is to provide the best financial services for customers, while banks goal is to make as much money off their customers as they can. Thus banks are far more likely to do risky things with people's money and end up collapsing in their pursuit of profits.

Its unprofessional for banks to fall out of their standard by a little or no mistake.The banks are supposed to make us feel confident that we can actually rely on their working values and standards and also actualize the trust we have on them.
  Credit union are truly a non-profit organization,yeah true but they seem to be capable and active than our verified banks.It's so annoying to be let down and disappointed by the banks,meanwhile,credits unions are supposed to just assist our financial needs maybe through savings and loans;in other words,I think they offer the same financial aids and services to people just like banks.Both institutions offer the same benefits like interest rates, customer service and ATM access.
 There's seriously just few difference between them but the decisions depends on you to determine which one can be good of fit and balance to your financial aids.

[Blitzboy]

Credit unions prioritize member well-being over profit maximization. Their fundamental distinction puts them apart from big banks, which prioritize profit over consumer protection and interests.

According to my financial ecosystem analysis, credit unions are more cautious investors and lenders. Their prudence has prevented high-risk activities that caused the crises you highlighted. Their non-profit status offers cheaper rates for members and less irresponsible speculating, which has brought down many a huge bank.

You support Bitcoin because you want alternatives to traditional banking vulnerabilities. Big banks' centralized control and profit-driven models cannot match Bitcoin's decentralized financial sovereignty. Consumer knowledge and frustration with the status system are driving the shift to credit unions and Bitcoin.

[DaveF]

Credit unions prioritize member well-being over profit maximization. Their fundamental distinction puts them apart from big banks, which prioritize profit over consumer protection and interests.

According to my financial ecosystem analysis, credit unions are more cautious investors and lenders. Their prudence has prevented high-risk activities that caused the crises you highlighted. Their non-profit status offers cheaper rates for members and less irresponsible speculating, which has brought down many a huge bank.

You support Bitcoin because you want alternatives to traditional banking vulnerabilities. Big banks' centralized control and profit-driven models cannot match Bitcoin's decentralized financial sovereignty. Consumer knowledge and frustration with the status system are driving the shift to credit unions and Bitcoin.

Credit unions IN THEORY should prioritize member well-being over profit maximization. However, they are still run by humans who do make mistakes, have prejudices towards certain investments and so on.

With the standard YMMV this is just me and so on I find that the banking services attached to brokerages (Fidelity, etc.) are far better then credit unions and credit unions are far better then banks. The catch is you need to have money in stocks / bonds / whatever. So if you have a 401k or other portfolio you may be better off using the banking services from there then something else. But, as I started with, YMMV and this is not investment advice, etc.

OTOH, the main advantage of a local credit union at least for me is the local part, I am not calling a call center someplace else in the world. It's close to me. I can't comment on the larger nationwide ones so it may be different depending on which one you use.

-Dave

[Youngkhngdiddy]

In the US you always see stories in the media about people having their accounts frozen for no reason, or people losing money to bank fraud and scams, etc.
The 2008 financial crisis involved the biggest banks in the United States going under or getting bailed out with taxpayer dollars.

In more recent times major regional banks like Silicon Valley Bank and others have imploded and there appears to be another serious banking crisis on the horizon according to many.

But I never heard anything about credit unions having such problems. Why is that?

I do not trust the big banks but still use Chase for much of my day to day banking only because it is more convenient. But most of my savings are in my credit union or invested in bitcoin.
I will be using my credit union much more in the future. Seeing literally hundreds of media reports on Youtube in the last few months about people losing money at their bank from fraud or having their accounts frozen for no reason is scaring me.
 
Why are the big banks so corrupt and incompetent?

https://cointelegraph.com/news/saturday-night-live-pokes-fun-trump-debanking-no-joke

    Credit unions are non-profit organizations. They have their expenses, of course, but they’re not aiming for profit, so in general their fees are lower, they offer higher interest, and so forth. As you’re a member, you have more say in the credit union’s policies. They tend to be smaller, although small for-profit banks have this advantage as well. You tend to get better service, as the staff may actually know you. It would be harder for someone to defraud you (for instance, by showing up with fake ID and a check, then withdraw from your account).
   Credit unions are focused on serving their membership rather than shareholders, they also tend to be more conservative. Big banks tend to chase profits, which can lead them to take more speculative bets. That means credit unions often have tighter underwriting standards, so if you have less-than-perfect credit, you may have a tougher time being approved at a credit union. (That’s not true of all credit unions; some, especially those certified as CDFIs, may have a mission of helping members to improve their credit scores). Credit unions may also have better service than some banks, again depending on the credit union and the bank.