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If we could take a guess, your parents probably opened a bank account for you at their bank when you were young and you just … stuck with it, right? It likely never crossed your mind that you could switch. It’s even less likely that you considered a credit union vs a bank.
But just because your parents did something a certain way, doesn’t mean that’s what’s best for you. In fact, once you learn about credit unions, you might just find yourself trying to convince your parents to make the switch, too.
What is a Credit Union?
A credit union is a member-owned financial institution that works a lot like a bank, but prioritizes people over profit.
Credit unions distribute profits among you and the other members of your credit union in the form of lower interest rates, fees, etc. rather than lining the pockets of banking executives. In short, they make it easier to get better loans and financial guidance from real people who care about your financial well-being.
They offer:
- Checking and Savings Accounts
- Loans
- Credit and Debit Cards
- Money Orders
- ATMs
- And other services that banks offer
How Is a Credit Union Different from a Bank?
To understand how credit unions differ from banks, you first need to know how a bank works.
If you think a bank is owned by a bunch of men in suits at a round table in a fancy conference room with a gold bar cart filled with top-shelf whiskey … you’re probably right, tbh.
Every service fee, annual fee and interest you pay on a loan — most of it goes back to that table of bank owners.
And those suit-clad bank owners’ primary obligation? Their shareholders.
And their shareholders’ main concern? Profit.
And the higher their loan interest rates and the lower their savings interest rates are, the more they profit.
And they profit off you, their customer, so they can buy more top-shelf whiskey and custom tailored suits, increasing the already massive wealth gap.
A credit union, on the other hand, is member-owned — meaning that instead of a big table of bankers owning the bank…
you own it!
(Alexa, play Money by Cardi B)
Who Are Credit Unions For?
Lower fees, better savings interest rates, lower loan interest rates — does all this mean credit unions are only for those living paycheck to paycheck? Of course not.
Let’s say you’re on solid ground, financially. You worked hard for your money. Why shouldn’t you also get lower fees and better interest rates?
The added benefit is that what little money you do end up paying the credit union doesn’t go to bankers in a stuffy conference room — it goes back to help the community you love. That way, you get to keep more of your money AND encourage wealth distribution.
It’s a win-win for you and your community.


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Need a loan?
Don’t let the interest you pay line the pockets of rich bankers, keep it for yourself. Get a credit union loan instead.
Just answer a few questions … and we’ll do the rest.
Credit Union vs Bank Checking/Savings Accounts
As mentioned above, credit unions and banks both offer checking and savings accounts, with credit unions offering fewer types of checking and savings accounts. Despite this, credit unions still often offer direct deposit, overdraft protection and mobile banking.
And while larger banks might have bigger ATM networks, some credit unions waive fees at ATMs outside of the credit union. Banks don’t even do that for their own ATMs sometimes.


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view resourceCredit Union vs Bank Regulations
Banks are regulated by many different federal and state agencies:
- The Federal Reserve
- Federal Deposit Insurance Corporation
- Office of the Comptroller of the Currency
- Various interagency regulatory bodies
- Various state regulators
Federal credit unions, however, are regulated by the National Credit Union Administration on a federal level, which also operates the National Credit Union Share Insurance Fund. That fund is comparable to the FDIC and insures deposits.
So with a credit union, there are far fewer agencies meddling in your moolah.
There are some credit unions that aren’t federally backed: state-chartered credit unions. These credit unions are backed by private insurers rather than the government.

Credit Union vs Online Banking
Online banks have many advantages over regular banks — they’re always “open” and often have lower fees and rates because they’re not paying for the upkeep of brick-and-mortar locations.
And those fancy online bank apps are sweet! However, online banks still lack some functionalities and services that banks and credit unions have because they’re entirely online, e.g. you can’t walk in to talk to a human face to face, etc.
A credit union is a good balance between the convenience of a traditional bank and the low fees of an online bank plus the added benefit of personalized customer service.
AI is sweet, but real humans are sweeter.



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view resourceHow Safe is a Credit Union vs. a Bank
Federally insured credit unions are just as safe as FDIC-insured banks. The National Credit Union Share Insurance Fund is backed by the U.S. Treasury, and insures up to $250,000 — the same as banks.
And with state-chartered credit unions? Your deposits aren’t quite as secure as they are with a federally insured credit union, but state-chartered credit unions are still a very safe place to keep your money.
In addition to insuring your $$$, the NAFCU also holds credit unions to a high standard regarding cybersecurity. In fact, cybersecurity is such a high priority for NAFCU that they made it a top focus for compliance exams.
How to Join a Credit Union Vs Bank?
Banks are open to anyone and everyone, but credit unions are required to have a defined field of membership such as:
- a city
- a state
- an organization
- a religious institution
- a school
- a workplace
- a military branch
- etc.


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