BANKS VS CREDIT UNIONS

BANKS

• Banks
• A bank is a financial institution licensed to receive deposits and make loans. Banks may also provide financial services, such as wealth management, currency exchange and safe deposit boxes. There are two types of banks: commercial/retail banks and investment banks.

CREDIT UNION

• Credit union
• A credit union is a member-owned financial cooperative, democratically controlled by its members, and operated for the purpose of promoting thrift, providing credit at competitive rates, and providing other financial services to its members.

Untitled Slide

• One key difference is that a credit union is a not-for-profit institution. Since credit unions operate as nonprofits, they can offer higher interest rates on savings accounts and CDs, and lower interest rates on loan products and credit cards.

CREDIT UNION

• credit union chartered and supervised by the National Credit Union Association (NCUA), a federal government agency that functions much like the FDIC. Federal credit unions operate like retail banks with one major exception: every credit union member is also a partial owner of the institution.

Untitled Slide

• Second, unlike banks, credit unions are non-profit organizations. Their profits are distributed right back to their members. Because of this, credit unions often charge lower fees than banks and pay higher interest rates on savings accounts, money market accounts, interest checking accounts and certificates of deposit.

CREDIT UNION

• Credit unions are not-for-profit financial cooperatives, whose earnings are paid back to members in the form of higher savings rates and lower loan rates. Banks are for-profit corporations, with declared earnings paid to stockholders only.