Question

Sabrina is trying to decide between opening an account at a local commercial bank or at her college credit union. What TRUE statement about these two institutions will BEST influence her decision?


Since commercial banks are for-profit, they can often keep their costs down, which translates into higher interest rates for savings and lower rates on loans.


Since credit unions are for-profit, they can often keep their costs down, which translates into higher interest rates for savings and lower rates on loans.


Since commercial banks are nonprofit, they can often keep their costs down, which translates into higher interest rates for savings and lower rates on loans.


Since credit unions are nonprofit, they can often keep their costs down, which translates into higher interest rates for savings and lower rates on loans.

Answer 1

"Since credit unions are nonprofit, they can often keep their costs down, which translates into higher interest rates for savings and lower rates on loans."

Explanation: Credit unions are member‑owned, not‑for‑profit cooperatives that typically return earnings to members via better savings rates, lower loan rates, and fewer fees. Commercial banks are for‑profit and generally charge higher fees and loan rates to generate returns for shareholders.