Choosing between a bank and a credit union is a common decision that stumps consumers who are looking for a new place to stash their money. By understanding the differences between banks and credit unions, and weighing other factors, you can make a better-informed choice.
Like banks, credit unions are financial institutions that offer a wide range of financial accounts and services, but credit unions operate under a different game plan.
Banks aim to generate profits and boost shareholder value for investors, while credit unions are not-for-profit. Banks have customers and credit unions have members, who have an ownership stake in their credit unions.
Any profit generated by a credit union is returned to its members in various ways such as lower fees, lower borrowing rates or higher deposits rates forsavings accountsandcertificates of deposit (CDs).
