Credit Unions vs. Banks

On the surface, Credit Unions and Banks may seem very similar… both offer similar financial services like checking and saving accounts, credit and debit cards, auto loans, and mortgages; however, if you look a little deeper, you’ll begin to see the many differences.

 

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"Unlike banks, credit unions return their earning to their members..."

The most important distinction of credit unions vs. banks

  • A credit union is a not-for-profit financial institution that is owned by its members and works to serve their best interests.
  • A bank is a for-profit institution that is owned by its shareholders and exists to serve their best interests.

This distinction fosters a “People Helping People” philosophy amongst credit unions that further distinguishes them from banks, and benefits members in many ways.

 

Feature Credit Union Bank
Fees & Rates
  • Fewer fees
  • Lower loan & credit card interest rates
  • Higher interest rates
  • More fees
Ownership
  • Members are part owners of the credit union and share equal voting rights
  • Shareholders are part owners of a bank and have voting rights equal to the amount of shares they own.
Support
  • Members are top priority
  • Higher level of member service
  • Poor customer satisfaction
  • Impersonal. Customers are treated like a number
Security
  • Deposits are NCUA Insured
  • Deposits are FDIC Insured
Mission
  • Not for profit. Serves the best interest of members and community
  • For profit. Serves the best interests of stockholders and board members
Community Involvement
  • Active in the local community
  • Funds many charity events and financial education classes
  • Not community oriented
  • Lack of transparency and accountability to the community