Article, Banks versus Credit Unions

Bank or Credit Union: What’s the Difference?

On the surface, banks and credit unions are pretty similar. They both offer plenty of savings accounts, loans, online banking, etc. So what’s the difference? This It’s A Money Thing video highlights some differences. Read on for more details.

The Big 3

Credit Unions are Not-For-Profit, Member-Owned, and Co-operative.

Banks are… not.

Let’s break that down.


  • When a credit union makes money, that money is returned to members in the form of better rates on loans and deposits, and as dividends on savings. So the better a credit union does, the more members benefit. When a credit union makes money, it invests in its members.
  • Banks are for-profit institutions. When they make money, they invest in themselves.


  • A credit union’s members are the literal owners of the institution. Everyone with so much as a basic savings account has a share in the credit union, and a say in how it’s run. The Board of Directors is made up of members who volunteered and were voted in by other members. They aren’t paid, except in the way all members benefit when the CU does better. So they truly take member interests to heart.
  • Banks are owned by outside shareholders and controlled by appointed board members. When the bank does well, the outside shareholders make money. Customers won’t see direct benefits.


  • There are credit unions all over the country, and many of them work together to improve member experience, share knowledge, and solve community problems. One of the major benefits of this cooperation is the extensive network of ATMs and “Shared Branches” that stretches across the world. There are over 5,000 branches and 30,000 ATMs where members of any participating CU can do transactions without service fees.
  • Banks are self-reliant. They have to build up their own branch and ATM networks to serve customers. The biggest bank network in the US has just over 18,000 ATMs*.

There are more differences between banks and credit unions, but those are the big ones. You may find that a credit union charges lower fees (compare our fees to Wells Fargo) and offers better rates on loans and/or deposits (see our rates vs. Wells Fargo‘s). Whatever institution you choose, make sure you understand the details of your accounts and loans and know how to get in touch with someone who can help you if something goes wrong.


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