Credit unions are financial institutions formed by an organized group of people with a common bond. Members of credit unions pool their assets to provide loans and other financial services to each other.

How is a credit union different than a bank?

Membership Access

In order to join a credit union, potential members must be part of a field of membership, which is typically based on one’s employment, community, or membership in an association/organization.

Not-For-Profit Structure

Credit unions are not-for-profit organizations that exist to serve their members rather than to maximize corporate profits for shareholders. Credit unions see themselves as different from mainstream banks, with a mission to be community-oriented and serve people, not profit.

Governance

Credit unions differ from banks and other financial institutions in that those who have accounts in the credit union are its members (owners), and they elect their board of directors. Boards are usually operated by volunteers in credit unions, whereas traditional banks operate by paid board members.

Products and Services

Credit unions focus on providing a safe place to save and borrow at reasonable rates. Credit unions provide savings, credit, and other financial services to their members.

Favorable Rates

Fees and loan rates at credit unions are generally lower, while interest rates returned are generally higher than banks and other for-profit institutions. Members also enjoy fewer fees on average compared to banks.

NCUA Share Insurance Coverage

The National Credit Union Administration (NCUA) is the federal agency that charters and supervises federal credit unions. They also insure savings in federal and most state-chartered credit unions across the country through the National Credit Union Share Insurance Fund (NCUSIF), a federal fund backed by the full faith and credit of the United States government.