Gen Z and millennials less likely to bank with credit unions
Younger Americans are making different choices when it comes to banking. Credit unions used to be very popular in America. That seems to have changed. In a new survey by GOBankingRates, Gen Z and millennials are less likely to bank with credit unions than regular national banks or online banking. That is quite a shift. Older generations in America are more loyal to credit unions. 54 percent of adults in the United States between the ages of 55 and 64 use a credit union rather than a regular national bank. 60 percent of those over 65 are members of a credit union.
What is the difference between a bank and a credit union?
Both banks and credit unions both can make loans, accept deposits and provide other financial services but a credit union differs from a bank in one very significant way. While banks are there to make a profit, a credit union is a not-for-profit organization. A credit union returns the profits back to its members as higher savings rates, lower loan rates, and reduced fees. The attraction of a credit union is that it is a safe place to borrow or save at a reasonable rate. “Deciding whether you want to use a bank or a credit union is entirely up to you.” says Michael Norton, Senior Vice President, Investments for David Lerner Associates “A sensible middle ground of investing is always the best way to go. Don’t take risks with your money.”
Younger Americans and credit unions
The survey by GOBankingRates discovered that just over a quarter of people ages 18 to 24 use credit unions in the USA (26 percent.) By contrast, 36 percent of people in the same age group prefer to use national banks.
Between the age of 25 and 34, Americans are even less likely to use a credit union. The study found just 14 percent were a member of a credit union. This age group prefers online banks to walk into a branch of a national chain. Similarly, folks between 35 and 44 favor online banks (36 percent)—a low percentage of this age group banks with a credit union.
Millennials and Gen Z will decide how they move and save their money. The fact that younger Americans are banking online or with national banks rather than credit unions is interesting, but it doesn’t spell the end for credit unions entirely.
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