The Difference Between a Credit Union and Bank
How can banks and credit unions benefit me?
Finding a reputable bank or credit union can be a great, low-cost way to manage your finances that suits your needs.
What’s the difference between a credit union and bank?
Credit unions are financial institutions that are owned by members. In the United States, they are not-for-profits that operate to serve members rather than to maximize profits.
On the whole, credit unions typically offer higher savings rates, lower fees, and lower rates on loans compared to banks. You may be able to join a credit union based on where you live, where you work, where you worship, or your membership in an association.
How can I avoid money drains?
Investigate minimum balance and other requirements that can drain your savings. Budget realistically and save for extra expenses so they won’t strain your finances. Check out overdraft protection plans for your checking account, which could save you fees for bounced checks and help keep your account in the black.
Avoid alternative financial providers—such as payday lenders, check cashing centers, and rent-to-own operations—because they tend to charge higher fees for the same services. If you’ve used these loans in the past, get away from the practice.
What are the resources I can use?
- BankFind: This FDIC tool can help you compare products and fees at local banks.
- MyCreditUnion.gov: Visit this site to find a credit union in your area.
- Go Direct: If you have been receiving federal benefits by check—including Social Security, Veterans benefits, and Supplemental Security Income (SSI)—you must switch to direct deposit into a bank account or receive benefits on a pre-paid debit card.