Credit unions and banks are similar in that they both provide a wide range of financial products and services, but there are a few important differences you should know about. First, hear from some TEG members about what makes us different than a bank.
Credit unions were created with the goal of providing hardworking, everyday people with honest, trustworthy financial services. With a philosophy of people helping people, credit unions are not-for-profit financial institutions in which each participant has a say in things and benefits from the organization’s success.
When you join a credit union by opening a savings (or share) account, you’re called a member rather than a customer because your initial deposit makes you a part-owner of the credit union. At a credit union, the needs of members come first. Banks profit from their customers; credit unions return profits to their members in the form of better rates and fewer fees. Credit unions are also more focused on giving back to the community they serve and helping members improve their financial knowledge.
|Primary Focus:||Making a profit||Helping members and the community|
|Tax Status:||For-profit, pays taxes||Not-for-profit, tax exempt|
|Where Profits Go:||To shareholders||To benefit members|
|Rates & Fees:||More fees, rates structured for the benefit of the bank||Fewer fees, high savings yields, lower interest rates on loans|
|Insured Deposits:||Yes, to at least $250,000 by the FDIC||Yes, to at least $250,000 by the NCUA|