The following are key differences between Credit Unions and Banks.
Credit Unions
- Not-for-profit organizations
- Returns profits to members in the form of lower loan rates, higher savings rates, dividends and free to low-cost services
- Invests directly back to members
- Serve those individuals within their field of membership
- Have members who act as co-owners and 'own' a stake in the organization
- Credit Unions are member-service driven
- Credit Unions are federally insured by the National Credit Union Administration (NCUA)
- Elects a volunteer Board of Directors to represent member interests
Banks
- Profit-oriented organizations
- Returns profits to a small group of stockholders
- Invests in corporate bonds or stock market
- Serves anyone in the general public
- Controlled by stockholders and paid individuals
- Banks are profit-driven
- Banks are federally insured by the Federal Deposit Insurance Corporation (FDIC)
- Have a paid Board of Directors who represent the owners; customers do not have voting privileges