One of the questions we get the most often is: what is the difference between a Delaware Federal Credit Union and a Delaware Bank? Well, for starters, credit unions are not-for-profit organizations that are member owned and operated. They are also less expensive and feature better customer service than banks. For those who live, work, worship, or attend school in New Castle County Delaware, choosing the DEXSTA Federal Credit Union is the way to go. Allow us to explain why.
As we mentioned, credit unions are not-for-profit, while banks are for-profit. This makes a huge difference when it comes to how your bank treats you and your money. Because banks are for-profit, their goal is to maximize the profits they receive from their customers to reward their shareholders. Credit unions, on the other hand, are not-for-profit which means their goal is to provide services that benefit their community.
We started DEXSTA for just that reason. Founded in 1937, our Delaware Federal Credit Union was originally established to provide loans and banking services to employees at the DuPont Experimental Station during The Great Depression. At the time, wages were low and financial obligations were high, so twenty-two men pledged $5 apiece to provide assets for their community. Today, our goal is the same, serving more than 37,000 members of our county and state.
Another big difference between credit unions and banks is how they are owned. Banks are for-profit organizations that are owned and operated by shareholders: those who have purchased stock in the company. Shareholders with a greater investment in the bank have a greater say in how it is run. These shareholders hire paid board members who run the company with the goal of earning profits from their customers.
Conversely, credit unions do not have customers or owners, they only have members. This means that every person who invests their money with a credit union is also an owner of that credit union. Each member, regardless of how much they have invested in the credit union, has a vote in electing board members. They can even run as a board member themselves should they so choose to do so!
Because of these advantages, credit unions can better serve their members by providing financial services that are in their best interest. Funds are used to provide loans for first-time car buyers, first-time homeowners, teenaged credit card holders, and other community needs. We do not have to meet the needs of our shareholders, only the community members we serve.
This allows us to offer free checking accounts, high-interest savings accounts, and low-cost loans—and because we are federally insured, that means our accounts are insured up to $250,000, the same as any national bank. Though we’ve come a long way since we were founded in the 1930’s, our mission has always remained the same: to meet the financial needs of the New Castle Community. Join us today.