"The idea at credit unions is to get as many as people as possible into the banking system," he says.
NSF Credit unions may be more community-oriented and generally slightly less expensive than the big banks but they still charge for bounced checks and overdrafts. On average, the fee for insufficient funds is roughly $5 less at credit unions than banks or thrifts.
The average fee for overdrawing your account at a credit union is $24.88 while a bank or thrift would charge $29.58 according to the 2009 Bankrate Checking Study.
Nonsufficient funds fee
| Average credit union fee | $24.88 |
Average bank fee
(2009 Checking Study) | $29.58 |
At the most overdraft-friendly credit union in the survey, the State Employee's Credit Union in Raleigh, N.C., bouncing a check costs $12 per incident and the first two nonsufficient funds fees are waived.
The most costly overdraft fee in the survey turned up at VyStar CU in Jacksonville, Fla., where members are charged $32 per incident.
ATMs Convenient access to fee-free withdrawals nationwide is a big selling point with larger banks. But many credit unions are in a network of other credit unions to allow members wider access to their money.
Additionally, 18 of the 50 credit unions surveyed do not charge their members for ATM withdrawals outside of the network.
Some of those credit unions allow unlimited withdrawals from foreign ATMs and others only charge a fee after a certain number of withdrawals per month.
The typical fee for using another institution's ATM ranges between $0.65 and $2.50, with an average fee around $1.28.
Three of the credit unions surveyed allow nonmembers to use their ATMs fee-free. The average ATM fee for nonmembers amongst the fee-charging institutions ranges from $0.75 to $3.
Out-of-network ATM fee
| No fee | 18 credit unions |
| Fee | 32 credit unions |
"There are some really wonderful credit unions that are fairly aggressive in offering other services and some of that are no different than banks in offering overdraft and other solutions so its really buyer beware there. Just going to a credit union doesn't guarantee that you get the lowest price," says Israel.
Because credit unions restrict their services to members, it can seem prohibitive to get an account, however "a lot of people are eligible for membership and they may not even realize it," McBride says.
With the popular perception that free checking at banks is on the way to extinction, consumers may want to check out the checking services at their local credit union.
See the results of the 2010 Credit Union Checking Study.
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