Comparing Credit Unions and Banks
A credit union is a cooperative financial institution that is privately owned and controlled by its members, and operated for the purpose of promoting thrift, providing credit at reasonable rates, and providing other financial services to its members.
Many credit unions exist to further community development or sustainable international development on a local level.
Banks have customers. Credit Unions have members
Bank customers have no part in the decisions of how their money is handled by the corporation.
Credit unions differ from banks and other financial institutions in that the members who have accounts in the credit union are shared owners of the credit union and they elect their board of directors in a democratic one person-one vote system regardless of the amount of money invested in the credit union. Thus, a credit union’s policies governing interest rates and other matters are set by a volunteer Board of Directors elected by and from the membership itself.
Credit Unions offer all the essential services of banks
Credit unions offer many of the same financial services as banks, often using a different terminology; common services include: share accounts (savings accounts), share draft (checking) accounts, credit cards, share term certificates (certificates of deposit), and online banking. Normally, only a member of a credit union may deposit money with the credit union, or borrow money from it.
Other benefits of credit union membership
Credit unions have historically marketed themselves as providing superior member service and being committed to helping members improve their financial health.
Credit unions typically provide a broader range of loan and savings products at a much cheaper cost [to their members] than do most microfinance institutions.
Your savings are federally insured to a minimum $250,000 by the National Credit Union Administration, a U.S. Government Agency.
