What is a Credit Union?
A credit union is a not-for-profit financial institution owned by its members.
Credit unions are democratically controlled--each member has one vote regardless of how much money he or she has on deposit. The credit union, owned and directed by its members, is dedicated to the credit union philosophy of "People Helping People." Rather than paying profits to stockholders, credit unions return earnings to members in the form of higher dividends, lower interest rates on loans and improved member services. Credit unions are about relationships, not profits.
Credit Unions vs. Banks
| Credit Unions | Banks |
|---|---|
| Not for profit | Maximize Profit |
| Federally Insured up to $250,000 by NCUA | Federally Insured up to $250,000 by FDIC |
| Volunteer Board of Directors working for the members' interests | Paid Board of Directors elected by stockholders |
| Members have equal ownership | Stockholders have ownership |
| Return profits to members through lower loan rates and higher deposit rates | Profits are paid to stockholders |
| Fewer fees on accounts | Usually higher fees on accounts |
| Higher deposit rates | Usually lower deposit rates |