What’s the Difference Between a Bank and a Credit Union? 

Banks and credit unions are both financial institutions that offer a variety of personal finance and business products.  While nearly everyone in the United States is a member of a bank or credit union, or both, not nearly as many people understand the difference between the two.

No membership vs Membership

Most banks, especially large national ones, are willing to do business with anyone as long as the bank feels they can make money. Credit unions, on the other hand, are not available to just anyone. Each credit union will have its own requirements for membership.


The FDIC is an independent agency that guarantees you won’t lose the funds in your bank accounts. On the other hand, credit unions are insured by the NCUA (National Credit Union Administration).

National vs. Local

This one is more a generalization than a hard and fast difference.  While both banks and credit unions can be local or national, you’re likely far more familiar with national banks than you are a national credit union.

Interest rates vs Fees

Banks are for profit and must pay taxes, they often charge higher fees and pay lower rates to their customers. On the other hand, credit unions tend to charge less interest on loans, have lower fees, and pay higher interest rates on various types of savings accounts.

Convenience vs. Customer Service

Because most banks are larger, they typically offer more branches and have superior technology, mobile access, and rewards programs. Credit unions, typically being smaller and more focused on serving their members, can boast better customer service than their big bank counterparts.

Personal Service vs. Most Services

Being larger, banks are often able to provide a wider range of services to their customers than can a credit union. Conversely, a credit union serves a community and thus can offer more personalized services to their members

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