Credit Union vs Regular Banks?

Is it smarter to have an account with a credit union or just an average bank? What is the difference between the two?

5 Answers

  • 1 decade ago
    Favorite Answer


    1.Equally owned and managed by all their members; anyone in good standing can run for the Board of Directors

    2.Exist to help consumers build their wealth; measure success through member satisfaction; have severe restrictions on raising capital

    3.Are not-for-profit financial cooperatives

    4.Only a limited number of people can join; all members are equal--from workers to small business owners

    5.Earnings go back to members as better rates and fewer fees

    6.Pay all payroll, property, and applicable sales taxes

    Regular Banks

    1.Owned by their stockholders, with wealthier stockholders having greatest say in how things are run

    2.Exist to profit through fee income and investments or by raising capital through selling shares and buying or selling acquisitions

    3.Are for-profit businesses that keep their earnings

    4.Anyone can be a customer; if you are a big business, you'll get really good treatment and rates

    5.Profits go back to the stockholders, not to the banking customers

    6.Pay federal income taxes, though many smaller banks are exempt

    consumers benefit

    Credit unions provide benefits to members through higher dividend rates on deposits, lower rates on loans, and fewer fees. Credit unions also benefit all consumers by providing healthy competition that helps drive bank rates lower. What bankers are really complaining about is that credit unions have better rates than they do--but despite this, banks have far larger assets and money under their management than credit unions do.

  • 1 decade ago


    I agree that credit unions generally have lower rates on loans and higher rates on deposits. But the key difference is in how you're treated. Credit Unions understand that you are their member/owner and they truly have your best interests at heart. Banks, on the other hand, are working to make a profit for their shareholders. While most credit unions don't have as many branches, it's not all that important these days with online banking, bill pay, direct deposit, and ATMs. Credit Unions even have shared branching with others, so you can "bank" at a credit union other than your own. To find a credit union in your area, check out this site:

    Good luck!

  • 1 decade ago

    Credit Unions are not for profit, meaning all the money they make goes back into the operations of the Credit Union. This generally means that you'll earn better interest rates, pay less fees, etc. Banks are for profit institutions and money they make goes to their shareholders.

    It's a personal decision to bank with whom you trust the most. Many times, banks offer a more variety of services than smaller local credit unions, have more branches and ATMs, etc.

    On the other hand, if your community has a large credit union, it would probably be to your benefit to bank with them.

  • 1 decade ago

    yeah i've been a credit union member for years and have never had any problems. they generally have less fees, better interest rates, a lowest apr of any other bank. plus i've heard some truely heinous stories about other banks. i wouldnt go anywhere else if you have the option

  • How do you think about the answers? You can sign in to vote the answer.
  • Anonymous
    1 decade ago

    Credit union, less fees, more interest.

    Source(s): m
Still have questions? Get your answers by asking now.