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Credit unions deliver on lower fees and better interest rates, online access

Zoe Padgett

November 4, 2022 | 4 min read

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Key findings:

Americans open new checking and savings accounts

Most Americans have at least one bank account, according to our most recent findings from a study of U.S. adults. Only 8% of Americans lack a checking or savings account, with 60% having both, 24% having a checking account only, and 8% having a savings account only. 

One in three Americans have opened a new checking or savings account in the last 12 months, and another 45% are planning to open a new account in the next year. Reasons for opening a new account vary widely, with the biggest reasons being better terms (31%), attractive sign-up offers (31%), and simply needing a new account (31%). 

Opening a new bank account has never been easier – almost half (43%) of those who opened a new account in the last 12 months did it online, including 13% who opened their new account through an app. Comparatively, 39% opened their new account in-person, and 17% by phone. Of those who opened an account online, 57% did not speak to a real person while opening their account. Opening a new account online is quicker and easier, with 65% saying opening their account online took less than one hour (vs. 57% of those who opened their account in-person or by phone), and 70% saying it was “very easy” to open their new account (vs. 59% for in-person or by phone).

Young people less likely to bank with traditional banks

Younger Americans are more likely to flock to online-only banks and credit unions when compared with older age groups. About half (55%) of young adults ages 18-34 bank with a traditional bank (vs. 69% of those 35-64 and 79% of those 65 and up). Four in ten (40%) bank with an online-only bank (vs. 34% of those 35-64 and just 12% of those 65 and up), and just under a third (31%) bank with a credit union (vs. 28% of those 35-64 and 27% of those 65 and up). 

Credit union members show loyalty

While 28% of Americans bank with a credit union, only 20% say a credit union is their main financial institution. These credit union members may be more loyal, though. Among those who say a credit union is their main financial institution, 51% are likely to consider switching to a new bank or credit union if offered more benefits that could help make their money go further, compared with 60% of traditional bankers.

Looking at the Net Promoter Score® across bank types, credit unions (+39) and online-only banks (+39) are rated higher than traditional banks (+34). Banks beat out credit unions in their availability of free-to-use ATMs (45% vs. 19%), customer service (32% vs. 25%), and data privacy (29% vs. 18%); credit unions win out for their fees (28% vs. 35%) and interest rates (27% vs. 38%). However, among credit union members, almost half (47%) cite customer service as a main reason for banking with a credit union, along with lower fees (46%) and better interest rates (45%).

Credit unions offer key digital banking services

Credit unions are offering the digital services that are most important to customers. Nearly three-quarters (73%) of credit union members say that their credit union offers online access, and 67% have mobile app access. These are critical services – 56% of bank customers say online access is one of the features they care most about in their bank or credit union, and 46% say the same about mobile app access. Fewer say their credit union offers online chat or messaging (48%), online budgeting tools (36%), or integration with other web-based services (24%).

Physical branch locations still have a major role to play

While digital services are critical, physical branches are still important to most banking customers. Customers cite fee-free ATM networks (56%), online access (56%), and physical locations (48%) among their top priorities. But, 80% say it’s important that their bank has physical locations, showing that customers want both – an easy way to access their accounts online plus the ability to go into a branch location if need be.

Customers want debit card rewards

Debit card rewards programs could be another differentiator for credit unions. More than half (57%) of credit union members are offered a debit card rewards program, compared with 48% of traditional bank members. These programs could reach many customers, as 68% say they “always” or “frequently” use a debit card for purchases. Younger customers are the most interested in debit card rewards, with 84% of those ages 18-34 very or somewhat interested in such a program, along with 82% of those ages 35-64 and 60% of those ages 65 and up.

Net Promoter Score and NPS are registered trademarks of Bain & Company, Inc., Fred Reichheld and Satmetrix Systems, Inc

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