By YOUNG MONEY Staff
15 June 2011

For many younger Americans, the choice of banks is often a matter of convenience. A college campus might be flooded with ATMs from Bank of America, so the choice is relatively simple. As people start to look at their banking options, The Wall Street Journal points out that smaller credit unions actually offer benefits above and beyond many of the largest national banks.

Credit unions are essentially non-profit banks comprised of its own customers. Many are restricted to certain groups, such as the United Nations Federal Credit Union, which is limited primarily to U.N. employees. The Supreme Court decision in NCUA v. First National Bank & Trust and subsequent legislation have since expanded credit unions, with many open to residents in nearby towns.

Last year's Dodd-Frank Wall Street Reform and Consumer Protection Act will likely change the nature of competition between banks and credit union. As it is, Bankrate.com notes that fees at credit unions range between 15 and 50 percent less than those at banks, depending on the infraction. Interest rates on consumer loans range from 0.43 to 1.6 points lower than bank loans, while credit card rates are generally around 2 points lower.

Market Rates Insight reports that credit unions added more than 700,000 accounts in the past year, averaging more than 400 accounts per business. These new customers have added more than $39 billion in deposits.