Credit Union vs Bank

You may drive around town looking at all the various financial institutions. Some called banks or some called credit unions but what does that actually mean? There are a few key differences and it may cause you to pick better when opening an account. They essentially operate in the day-to-day items the same, with little impact to the member. Most people swipe a credit card and would not know if it was a bank card or a credit union card. However, there are implicit differences that will change your overall experience.

• Credit Unions

  • Non-profit organization that is a cooperative owned by the members

  • Members can vote on organizational impact

  • Requires membership with specific guidelines, usually by member referral or community centered

  • Local and regional, however, usually share ATM access

  • Lower to no fees and better loan rates

  • Community focused

  • Insured by NCUA

  • Ex: Hudson Valley Federal Credit Union or Mid-Hudson Credit Union

• Banks

  • For profit and owned by shareholders, with the goal of returning investment to them

  • Members do not have a say or vote in any changes

  • Open to all members but they are not treated as “owners”

  • Access to apps and technology with nationwide branches and access to a larger network

  • High fees

  • More “corporate”

  • Insured by the FDIC

  • Ex: Bank of America or JP Morgan Chase

If you want a nation wide, high accessibility, and high tech option that maximizes profit to their “owners” then go with a bank. If you want a more local, community focused “Ma and Pop” style place that treats you as the owner with a say in the operations and lower fees, pick a credit union. In most cases, the credit union option always will make the most sense for a daily use person.