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August 11, 2012 | credit-union-advocacy

Credit Unions vs. Banks

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.

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 $5. This share entitles members to vote in elections to have a say in how the credit union is run.

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