Banks and credit unions

Banks and credit unions provide many of the same services but are different entities. Ownership is one of the major differences. A credit union is owned by its members. Commercial banks are owned by stockholders. Size is another: The average bank is 14 times larger than the average credit union, according to the Credit Union National Association.

Products that both kinds of institutions carry include:

• Checking and savings accounts

• Mortgages

• Auto loans

• Certificates of Deposition (CDs)

• Bonds

Basic products

Checking accounts: Opening a checking account gives you the opportunity to set up direct deposit through your employer. The employer sends the money electronically to the bank and allows you to have quick access to your funds as soon as they are deposited. Check with your employer to determine when the funds will be in your account.

Others: CDs, bonds and IRAs are options to keep your cash stashed away for a longer period of time. The interest rate you earn on these may be higher than other highly liquid products, but you will be penalized if you take funds out before the expiration date. Talk to your financial institution about these products if you have extra money you do not plan on using.

Choosing an institution

Whether you consider using the services of a commercial bank, a credit union or a combination of both, there are a few things you should be sure to do:

Know all fees: Determine what fees are associated with any account you wish to open. For instance, checking and savings accounts may require a minimum balance, and a fee may be charged if your balance dips below the minimum. This type of account offers a higher return on your investment if you do not plan on touching the money for several months or years.

Know the terms: Ask about terms of the account and the agreement before you invest your money. IRAs and CDs are longer-term investments that will penalize you for taking out your money before the expiration or renewal date. Ask your financial institution how much this penalty is before you sign the final paperwork. Also, determine whether the bank or credit union keeps your beneficiary forms on file.

Consider also how Angie's List can help. Members have access to local consumer reviews on credit unions and banks, as well as service providers in more than 500 other categories.

Consumer contact

Each financial institution should have a customer service line. Depending on the institution and the issue at hand, you may have to call a toll-free number or use email or a personal visit to resolve your issue. Save information you receive from your financial institution. The customer service representative will direct you to any clause that explains your problem.

If you find that you are unable to make payments on a loan, communication is crucial. Speak with the loan department to discuss alternatives. Refinancing the loan may be an option to lower the monthly payment. Some institutions will let you skip a month by extending the loan contract by one month. Student loan payments may have a deferment option. Speak with the collections department to find out if an extension on your loan is possible. Late payments are not reported to the credit agency until they are 30 days late.

Identity theft

Tips for working with financial institutions to reduce the chances of identify theft:

• If you lose a debit card or check, immediately contact the issuing institution. A representative will cancel your card and send a new one. The bank or credit union can also place a stop payment on checks that are lost, though they may charge a fee for this service.

• Beware of unsolicited offers saying you're "prescreened" or "preapproved" for a credit card. These offers make it easier for scammers to open up credit in your name. Opt out of pre-screened credit card offers by visiting a special website sponsored by the Federal Trade Commission.

• Check your credit report regularly. This is something you can do for free, and the FTC warns against falling for scams that charge you for seeing your credit reports. Look through the entries for anything that you did not authorize. Take a precautionary measure by adding a fraud alert to your account through one of the credit bureaus. This will require them to take more steps in verifying your identity before extending credit.

Mortgage tips

Tips to consider if you're in the market for a mortgage loan:

• Keep tabs on mortgage interest rates to determine when you should lock in your rate and terms.

• Find a loan officer who'll contact you if rates drop. Mortgage rates can change throughout a day.

• To determine if refinancing is an option for you, consider the standard rule that you should recoup the cost if you can lower the interest rate by at least 1 percent.

• Request a "truth in lending" statement from each financial institution with which you discuss mortgages. This form shows the honest breakdown of all the fees and the total amount that will be paid over the course of the loan.

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