There are both important differences, and many meaningful similarities between credit unions and banks that are of note.
Main differences between banks and credit unions
The main difference is that credit unions are not-for-profit cooperatives; there aren’t shareholders. The members of the credit union are the profit sharers, and their voice comes first.
The First Choice Federal Credit Union Board of Directors, for instance, are not paid positions. These positions are filled with members, whom are elected to those posts.
And what about you, as our member? You receive profits in the form of lower loan interest rates, new product offerings at low or no costs, keeping fee structures to a rock-bottom minimum and providing savings and dividend rates.
Our shareholders are your neighbors, your employees and your employer. We are community driven from the inside out, and do not answer to nameless, faceless people only vested in our credit union for profit.
Similarities that may surprise you
The first major similarity between banks and credit unions is in keeping you safe. Both have their funds insured by the full faith of the U.S. Federal Government. FDIC and NCUA are both run by the United States Federal Government, and offer equal coverage of all deposits held at any bank or credit union. Using a credit union means that you are no less secure than using a bank for your money.
Our products and services are also very similar to that offered at a bank. We offer low, low rates on our loan programs for a new or used car, as well as comparable rates on mortgages. Most credit unions, like banks, also offer credit card plans that are comparable to other large banking institutions.
Other things that you should know
Each credit union is a different size, and the size can impact the services they are able to offer. This can mean that each loan program is more customized to the community’s needs, not the bank needs.