The Credit Union Difference: What Sets Us Apart from Banks
Although banks and credit unions both offer many of the same products and services, there are key differences that set us apart. Banks are for-profit corporations that are owned by investors, while credit unions are not-for-profit financial cooperatives that are owned by our members – you! Here are some of the other major differences between banks and credit unions:
Priorities & Values
Banks exist to create a profit for their shareholders, while credit unions exist to give back to our members and our communities. Since credit unions are not-for-profit, we are able to give our earnings back to our members in the form of lower loan rates, higher deposit rates, leading technology services, and little to no fees. We also give our earnings back to our community through by providing donations local non-profits, sponsoring community events, supporting small businesses, volunteering, providing scholarships, and so much more.
Service
As large corporations, banks are often not able to provide tailored customer service. As a credit union, we prioritize member service over anything else. We take the time to truly understand our members’ individual circumstances and work to provide the products and services to best suit your unique needs.
Fees
Banks tend to charge higher fees for products and services than credit unions. As for-profit corporations, banks have greater overhead costs, which are then passed on to their customers in the form of more and higher fees. Since credit unions are not-for-profit, our members don’t have to pay our operating costs, so we are able to offer significantly fewer and lower fees on our products and services.
Interest Rates
Banks loans typically have higher rates on loan than credit unions, so you will generally end up paying more over the life of the loan with a bank than you will with a credit union. Additionally, the Annual Percentage Yield (APY) on deposit accounts – checking, savings, certificates – are typically higher at a credit union than at a bank, so you will be able to earn more at a credit union!
Shareholders
Banks are owned by their investors, whereas credit unions are owned by our members. Sometimes bank investors may not even hold accounts at that bank, while credit union members are depositors and/or borrowers, and also have voting rights in how the credit union is run. As a credit union member, you are also an owner, so you have a personal stake and a say in how your financial institution operates.
Similarities Between Banks and Credit Unions
Despite our many differences, banks and credit unions also share several important similarities!
- Products & Services – All banks and most credit unions offer basic accounts like checking and savings accounts as well as certificate accounts. We also offer loan accounts including home, auto, personal loans, credit cards, and more.
- Digital Banking – Big banks and many credit unions offer the convenience and security of banking on-the-go with mobile bank app technology.
- Federal Insurance – Customer funds at a bank are federally insured by the FDIC, while member funds at a credit union are federally insured by the NCUA. Both the FDIC and NCUA insure funds up to $250,000.
Ready to make the switch to a credit union? Open an account today!
Want to learn more about the credit union difference? Click here!
At Robins Financial Credit Union, our mission is to enhance the financial well-being of our members and community. We honor this commitment by providing educational content to help you make the most of your finances. Read our other blog articles to help you gain the financial knowledge you need to succeed.
Learn More About the Credit Union Difference