Before you decide on a financial institution to deposit your savings or to secure a home mortgage or car loan, you'll want to make sure you are getting the best available interest rate. You can check with banks or credit unions to see their current published rates.
In general, credit unions offer higher savings rates, meaning that your money grows faster, and lower rates on loans, meaning that you will owe less over the lifetime of the loan. Credit unions also tend to charge less in fees and offer better interest rates on credit cards.
Datatrac, a financial research and technology firm, regularly provides NCUA with credit union and bank interest rate comparisons.
In its June 2011 analysis, Datatrac found that the difference between banks and credit unions was greatest in car loan interest rates, where credit unions offered 36-month, two-year-old car loans at 3.88% interest compared to 5.61% for banks. Credit unions also offered an average interest rate for 48-month, new car loans at 3.80% compared to 5.12% for banks.
In the same survey, Datatrac found that credit unions and banks had comparable interest rates for 5-year CDs (2.09% vs. 1.78% for all banks) and for 30-year fixed mortgages (4.78% vs. 4.64% for banks).