Credit Unions vs. Banks
 
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Research and articles related to credit unions and financial cooperatives

Financial Advice

CREDIT UNION ADVOCACY

Articles and research about financial cooperatives

Research and articles related to credit unions and financial cooperatives

Financial Advice

CREDIT UNION ADVOCACY

Articles and research about financial cooperatives

Credit Unions vs. Banks

Published August 11, 2012 | Updated February 1, 2014

How Do Credit Unions Differ from Banks?

Credit unions are member-owned cooperatives. That means any profits realized by credit unions are returned to their members (anyone who has an account with the credit union) in the form of lower interest rates on loans and better dividend rates on deposits.

The operating philosophy of credit unions is "not for profit, but for service." Before making any decision, a credit union like Amplify will ask, “Is this in the best interest of the members?” The sole reason credit unions exist is to serve their members, and they treat every member with the respect and consideration that implies.

Credit Unions Banks
Ownership & Structure Owned by members who have accounts at the CU Owned by stockholders who don't necessarily have accounts at the bank
Governance Volunteer Board of Directors elected by members Paid Board of Directors elected by stockholders
Insurance NCUA-insured up to $250,000 FDIC-insured up to $250,000
Profit & Earnings Non-profit: net income is used to offer lower loan rates, higher savings dividends, and lower fees in general For-profit: portion of net income used to pay stockholders
Products & Services Checking, Savings, Money Markets, Share Certificates, Auto Loans, Mortgages, Personal Loans, Home Equity Loans & LOCs, Retirement Accounts Checking, Savings, Money Markets, Certificates of Deposit, Auto Loans, Mortgages, Personal Loans, Home Equity Loans & LOCs, Retirement Accounts
Accessibility Branches, Online Banking, Mobile Apps, ATMs Branches, Online Banking, Mobile Apps, ATMs

Membership Eligibility

Each federal credit union's charter outlines requirements for member eligibility. For example, at Amplify Credit Union, anyone who lives, works or attends school in Travis, Williamson, Hays, Caldwell and Bastrop counties is eligible to become a member. When you join, a portion of your opening deposit, called your membership share, grants you your share of ownership in the credit union. At Amplify, the share deposit is $25. This share entitles members to vote in elections to have a say in how the credit union is run.

To research more about credit unions, visit www.ncua.gov

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