BankInsecure.com
June 19, 2025
Banks and credit unions can be firece competitors, and often donlt soeak too kindly of one another. Here are the facts, and consumers can decide.
FEES CHARGED TO CUSTOMERS
When comparing the average fees of banks versus credit unions, credit unions generally tend to have lower fees than traditional banks. This is largely due to their not-for-profit, member-owned structure, where earnings are often returned to members in the form of better rates and lower fees, rather than distributed to shareholders.
Here’s a breakdown of common fees:
Monthly Maintenance Fees:
Many large banks often charge monthly maintenance fees for checking accounts, which can range from $12-$15. These fees can sometimes be waived by meeting certain requirements (e.g., maintaining a minimum balance, setting up direct deposit).
Credit unions, on the other hand, typically offer checking accounts with no monthly fees.
Overdraft Fees (ODF) and Non-Sufficient Funds (NSF) Fees:
Historically, banks have charged higher overdraft fees, with the average around $35 per incident. While some banks have begun to reduce or eliminate these fees, many still charge significant amounts. For example, some large banks like Chase and Wells Fargo have overdraft fees around $34-$35.
Credit unions generally charge lower overdraft fees. For instance, some credit unions like Boeing Employees Credit Union charge around $10, and some, like Alliant Credit Union, Connexus Credit Union, and Self-Help Credit Union, have eliminated overdraft fees entirely.
In 2024, consumers paid an estimated $12.1 billion in overdraft and NSF fees, with a portion of that attributable to credit unions (estimated at $5.4 billion in 2024), but overall, credit unions on average charge less for NSF fees than banks (around $28.08 for credit unions versus $30.81 for banks).
ATM Fees:
For out-of-network ATM withdrawals, bank customers might face two fees: one from their own bank (average of $1.58) and a surcharge from the ATM owner (average of $3.19), totaling an average of $4.77 per transaction in 2024.
Credit unions often have arrangements for lower or refunded ATM fees when using out-of-network ATMs, or they belong to larger surcharge-free ATM networks.
Credit Card Late Fees:
Average credit card late fees at banks have been reported around $34.18.
Credit unions typically have lower credit card late fees, with an average around $24.56.
Mortgage Closing Costs:
Credit unions tend to have in summary, credit unions generally offer a financial advantage to consumers through lower fees across various banking services and products compared to traditional for-profit banks.
INTEREST
It is often useful to look at the net interest margin. This is the spread between what the institution pays of your money versus what interest rate they charge for the consumer to borrow money.
The average spread between loan rates and deposit rates shows some variations between large banks and credit unions.
For Large Banks:
Large U.S. banks typically maintain NIMs between 2.5% and 3.5%.
In the third quarter of 2024, the banking industry’s net interest margin increased to 3.23%. This rise was notably driven by an increase in loan yields that outpaced the increase in the cost of deposits.
For Credit Unions:
The net interest margin for U.S. credit unions was reported at 3.23% in the first quarter of 2025.
For federally insured credit unions, the NIM was 3.05% of average assets in the year to date through the second quarter of 2024.
In 2023, the net interest margin for credit unions reached 3.01%.
While both large banks and credit unions exhibit similar average spreads in recent periods, it’s worth noting that credit unions, as not-for-profit institutions, often aim to return excess earnings to their members through more favorable rates on loans and deposits, or through lower fees. Banks, being for-profit entities, typically aim to maximize this spread for the benefit of their shareholders.
So them’s the facts!!! Both institutions offer many benefits. It is important to examine your goals, but there can be distinct advantages with credit unions when it comes to rates and fees.
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