Differences Between Credit Unions and Banks

When discussing products and services with new or existing members, our team is often asked, “What makes you guys better than a bank?” Well, that’s really for the individual to decide. However, what we can do is explain some differences between credit unions and banks so our members are able to create a better-informed opinion.

Arguably, one of the greatest differences between banks and credit unions is profit status. While banks are for-profit, meaning they are either privately owned or publicly traded, credit unions are nonprofit institutions. This for-profit vs. not forprofit divide is the reason for the difference between the products and services each institution offers. A credit union is owned by its members, and so credit unions typically open membership to individuals who share a common bond, ONE Federal Credit Union’s being location.

It is a credit union’s mission to provide its members with the best terms it can afford for their financial products. This means members generally get lower rates on loans, pay fewer (and lower) fees, and earn higher APYs on savings products than bank customers do (depending on economic climate).

Banks typically have a technological advantage over credit unions, which in turn, can mean greater convenience. With a plethora of products and services, vast branch & ATM locations, and advanced online solutions, banks are able to offer their services to a wide array of individuals.

The majority of credit unions stay local and focus their spending power on community and member relations, thus better savings and loan rates, as well as higher community involvement. Credit unions are committed to serving their members, and so they are often described as having better service.

Although both types serve as financial institutions, each has its advantages. At ONE Federal Credit Union, we’ll make sure to help you reach your financial goals, however that may be.