Credit Unions vs. Banks

In order to get a better understanding of the credit union difference, it helps to know what credit unions and banks are about. Below is a brief comparison of how credit unions and other financials institutions differ.

Credit UnionsBanks
Credit unions have members, not customers. They can only serve those within their membership.Banks can serve anyone in the general public.
Credit unions are democratically controlled by the members and have voluntary board members.Banks only allow investors and paid officials to have voting privileges.
Credit unions are not-for-profit organizations.Banks are profit-oriented and only investors get a share of the profits.
Each credit union member who deposits money has a share of ownership within the organization with voting rights.Bank customers do not have ownership within the organization nor do they have voting privileges.
Credit unions are member service driven.Banks are driven by profit.
Credit unions are federally insured by the National Credit Union Share Insurance Fund (NCUSIF) and operate on a pay-as-you-go system.Banks are insured by the Federal Deposit Insurance Corporation and do not operate on a pay-as-you-go system.
Credit unions return excess profit in the form of lower loan rates, higher savings rates and free or low cost services.Banks return excess profits to a small group of investors and stockholders.