Credit Union vs. Bank: What's the Difference?
Edited by Huma Saeed || By Sawaira Riaz || Published on November 7, 2023
Credit Unions are member-owned cooperatives offering financial services, while Banks are for-profit institutions providing a range of financial services.
Key Differences
Credit Unions and Banks both serve as financial institutions, but they have distinct operational structures. A Credit Union is a not-for-profit organization owned by its members, typically bound by a common bond like occupation or community. These members are both owners and customers. On the other hand, a Bank operates as a for-profit entity, owned by shareholders who expect returns on their investments. Customers of Banks do not have ownership stakes unless they also hold shares.
Sawaira Riaz
Nov 07, 2023
In terms of the services offered, both Credit Unions and Banks provide similar products, such as checking and savings accounts, loans, and credit cards. However, due to their cooperative nature, Credit Unions often return profits to members through lower fees, higher savings rates, and lower loan rates. Banks, conversely, aim to generate profits for shareholders, which can lead to higher fees and rates for customers.
Sawaira Riaz
Nov 07, 2023
Credit Unions emphasize personal relationships and community involvement. Given their cooperative model, they often possess a deep-rooted community focus, sponsoring local events and supporting local causes. Banks, especially larger ones, might have a broader, often national or international, scope, which can sometimes lead to a less personalized customer experience.
Sawaira Riaz
Nov 07, 2023
Regulatory environments also differentiate Credit Unions from Banks. Credit Unions, being not-for-profit, have specific tax advantages. They are usually regulated by different governmental agencies than Banks, with many under state jurisdictions. Banks, whether they're national or state-chartered, face a different set of regulatory standards and are generally subjected to federal and state taxation.
Sawaira Riaz
Nov 07, 2023
Lastly, while both Credit Unions and Banks employ technology to enhance customer experience, Banks, especially bigger ones, might have more advanced technological infrastructures due to larger capital resources. However, Credit Unions, given their member-centric approach, ensure their services remain accessible and competitive.
Harlon Moss
Nov 07, 2023
ADVERTISEMENT
Comparison Chart
Primary Objective
Serve members and community.
Generate profit for shareholders.
Sawaira Riaz
Nov 07, 2023
Regulatory Environment
Often state-regulated with specific tax advantages.
State or federally regulated, subjected to federal and state taxes.
Harlon Moss
Nov 07, 2023
Scope & Relationship
Community-focused with personalized relationships.
Broader scope, potentially less personalized.
Harlon Moss
Nov 07, 2023
ADVERTISEMENT
Credit Union and Bank Definitions
Credit Union
Financial institution emphasizing community service and member benefits.
The Credit Union sponsored the town's annual parade.
Sawaira Riaz
Oct 21, 2023
Bank
Corporation involved in borrowing, lending, and safeguarding money.
With her paycheck, Emily visited the Bank to deposit her earnings.
Aimie Carlson
Oct 21, 2023
Credit Union
Member-driven institution providing financial services and education.
The Credit Union held financial literacy workshops for students.
Sawaira Riaz
Oct 21, 2023
Credit Union
Community-centric bank alternative emphasizing mutual benefits.
After experiencing high fees, Linda switched to a Credit Union.
Harlon Moss
Oct 21, 2023
ADVERTISEMENT
Credit Union
A not-for-profit financial cooperative owned and operated by its members.
John joined the local Credit Union to support community-based banking.
Sawaira Riaz
Oct 21, 2023
Credit Union
Cooperative offering banking services with profits returned to members.
Lower loan rates were a prime attraction at the Credit Union.
Sawaira Riaz
Oct 21, 2023
Bank
The slope of land adjoining a body of water, especially adjoining a river, lake, or channel.
Sawaira Riaz
Oct 13, 2023
Bank
The lateral inward tilting, as of a motor vehicle or an aircraft, in turning or negotiating a curve.
Sawaira Riaz
Oct 13, 2023
Bank
A business establishment in which money is kept for saving or commercial purposes or is invested, supplied for loans, or exchanged.
Sawaira Riaz
Oct 13, 2023
Bank
The funds held by a dealer or banker in certain games, especially gambling games.
Sawaira Riaz
Oct 13, 2023
Bank
The reserve pieces, cards, chips, or play money in some games, such as poker, from which the players may draw.
Sawaira Riaz
Oct 13, 2023
Bank
(Medicine) A supply of human fluids or tissues, such as blood, sperm, or skin, that is stored in a facility for future use.
Sawaira Riaz
Oct 13, 2023
Bank
To cover (a fire), as with ashes or fresh fuel, to ensure continued low burning.
Sawaira Riaz
Oct 13, 2023
Bank
To construct with a slope rising to the outside edge
The turns on the racetrack were steeply banked.
Sawaira Riaz
Oct 13, 2023
Bank
To tilt (a motor vehicle) laterally and inwardly when negotiating a curve.
Sawaira Riaz
Oct 13, 2023
Bank
(Games) To strike (a billiard ball) so that it rebounds from the cushion of the table.
Sawaira Riaz
Oct 13, 2023
Bank
(Sports) To play (a ball or puck) in such a way as to make it glance off a surface, such as a backboard or wall.
Sawaira Riaz
Oct 13, 2023
Bank
To arrange or set up in a row
"Every street was banked with purple-blooming trees" (Doris Lessing).
Sawaira Riaz
Oct 13, 2023
Bank
(countable) An institution where one can place and borrow money and take care of financial affairs.
Sawaira Riaz
Oct 13, 2023
Bank
(countable) A fund from deposits or contributions, to be used in transacting business; a joint stock or capital.
Sawaira Riaz
Oct 13, 2023
Bank
The sum of money etc. which the dealer or banker has as a fund from which to draw stakes and pay losses.
Sawaira Riaz
Oct 13, 2023
Bank
(countable) In certain games, such as dominos, a fund of pieces from which the players are allowed to draw.
Sawaira Riaz
Oct 13, 2023
Bank
A safe and guaranteed place of storage for and retrieval of important items or goods.
Blood bank; sperm bank; data bank
Sawaira Riaz
Oct 13, 2023
Bank
(countable) A device used to store coins or currency.
If you want to buy a bicycle, you need to put the money in your piggy bank.
Sawaira Riaz
Oct 13, 2023
Bank
An elevation, or rising ground, under the sea; a shallow area of shifting sand, gravel, mud, and so forth (for example, a sandbank or mudbank).
The banks of Newfoundland
Sawaira Riaz
Oct 13, 2023
Bank
A mass noun for a quantity of clouds.
The bank of clouds on the horizon announced the arrival of the predicted storm front.
Sawaira Riaz
Oct 13, 2023
Bank
(mining) A deposit of ore or coal, worked by excavations above water level.
Sawaira Riaz
Oct 13, 2023
Bank
A row or panel of items stored or grouped together.
A bank of switches
A bank of pay phones
Sawaira Riaz
Oct 13, 2023
Bank
A row of keys on a musical keyboard or the equivalent on a typewriter keyboard.
Sawaira Riaz
Oct 13, 2023
Bank
(computing) A contiguous block of memory that is of fixed, hardware-dependent size, but often larger than a page and partitioning the memory such that two distinct banks do not overlap.
Sawaira Riaz
Oct 13, 2023
Bank
The regular term of a court of law, or the full court sitting to hear arguments upon questions of law, as distinguished from a sitting at nisi prius, or a court held for jury trials. See banc
Sawaira Riaz
Oct 13, 2023
Bank
(music) A bench, or row of keys belonging to a keyboard, as in an organ.
Sawaira Riaz
Oct 13, 2023
Bank
(intransitive) To deal with a bank or financial institution, or for an institution to provide financial services to a client.
He banked with Barclays.
Sawaira Riaz
Oct 13, 2023
Bank
To conceal in the rectum for use in prison.
Johnny banked some coke for me.
Sawaira Riaz
Oct 13, 2023
Bank
(transitive) To cover the embers of a fire with ashes in order to retain heat.
Sawaira Riaz
Oct 13, 2023
Bank
(transitive) To raise a mound or dike about; to enclose, defend, or fortify with a bank; to embank.
Sawaira Riaz
Oct 13, 2023
Bank
To provide additional power for a train ascending a bank (incline) by attaching another locomotive.
Sawaira Riaz
Oct 13, 2023
Bank
A mound, pile, or ridge of earth, raised above the surrounding level; hence, anything shaped like a mound or ridge of earth; as, a bank of clouds; a bank of snow.
They cast up a bank against the city.
Sawaira Riaz
Oct 13, 2023
Bank
The margin of a watercourse; the rising ground bordering a lake, river, or sea, or forming the edge of a cutting, or other hollow.
Tiber trembled underneath her banks.
Sawaira Riaz
Oct 13, 2023
Bank
An elevation, or rising ground, under the sea; a shoal, shelf, or shallow; as, the banks of Newfoundland.
Sawaira Riaz
Oct 13, 2023
Bank
The lateral inclination of an aëroplane as it rounds a curve; as, a bank of 45° is easy; a bank of 90° is dangerous.
Sawaira Riaz
Oct 13, 2023
Bank
A group or series of objects arranged near together; as, a bank of electric lamps, etc.
Sawaira Riaz
Oct 13, 2023
Bank
The tilt of a roadway or railroad, at a curve in the road, designed to counteract centrifugal forces acting on vehicles moving rapiudly around the curve, thus reducing the danger of overturning during a turn.
Sawaira Riaz
Oct 13, 2023
Bank
A bench, as for rowers in a galley; also, a tier of oars.
Placed on their banks, the lusty Trojan sweepNeptune's smooth face, and cleave the yielding deep.
Sawaira Riaz
Oct 13, 2023
Bank
An establishment for the custody, loan, exchange, or issue, of money, and for facilitating the transmission of funds by drafts or bills of exchange; an institution incorporated for performing one or more of such functions, or the stockholders (or their representatives, the directors), acting in their corporate capacity.
Sawaira Riaz
Oct 13, 2023
Bank
A fund to be used in transacting business, especially a joint stock or capital.
Let it be no bank or common stock, but every man be master of his own money.
Sawaira Riaz
Oct 13, 2023
Bank
The sum of money or the checks which the dealer or banker has as a fund, from which to draw his stakes and pay his losses.
Sawaira Riaz
Oct 13, 2023
Bank
In certain games, as dominos, a fund of pieces from which the players are allowed to draw; in Monopoly, the fund of money used to pay bonuses due to the players, or to which they pay fines.
Sawaira Riaz
Oct 13, 2023
Bank
To raise a mound or dike about; to inclose, defend, or fortify with a bank; to embank.
Sawaira Riaz
Oct 13, 2023
Bank
To build (a roadway or railroad) with an inclination at a curve in the road, so as to counteract centrifugal forces acting on vehicles moving rapiudly around the curve, thus reducing the danger of vehicles overturning at a curve; as, the raceway was steeply banked at the curves.
Sawaira Riaz
Oct 13, 2023
Bank
To tilt sidewise in rounding a curve; - said of a flying machine, an aërocurve, or the like.
Sawaira Riaz
Oct 13, 2023
Bank
A financial institution that accepts deposits and channels the money into lending activities;
He cashed a check at the bank
That bank holds the mortgage on my home
Sawaira Riaz
Oct 13, 2023
Bank
Sloping land (especially the slope beside a body of water);
They pulled the canoe up on the bank
He sat on the bank of the river and watched the currents
Sawaira Riaz
Oct 13, 2023
Bank
A supply or stock held in reserve for future use (especially in emergencies)
Sawaira Riaz
Oct 13, 2023
Bank
A building in which commercial banking is transacted;
The bank is on the corner of Nassau and Witherspoon
Sawaira Riaz
Oct 13, 2023
Bank
An arrangement of similar objects in a row or in tiers;
He operated a bank of switches
Sawaira Riaz
Oct 13, 2023
Bank
A container (usually with a slot in the top) for keeping money at home;
The coin bank was empty
Sawaira Riaz
Oct 13, 2023
Bank
The funds held by a gambling house or the dealer in some gambling games;
He tried to break the bank at Monte Carlo
Sawaira Riaz
Oct 13, 2023
Bank
A slope in the turn of a road or track; the outside is higher than the inside in order to reduce the effects of centrifugal force
Sawaira Riaz
Oct 13, 2023
Bank
A flight maneuver; aircraft tips laterally about its longitudinal axis (especially in turning);
The plane went into a steep bank
Sawaira Riaz
Oct 13, 2023
Bank
Do business with a bank or keep an account at a bank;
Where do you bank in this town?
Sawaira Riaz
Oct 13, 2023
Bank
Have confidence or faith in;
We can trust in God
Rely on your friends
Bank on your good education
I swear by my grandmother's recipes
Sawaira Riaz
Oct 13, 2023
Bank
A for-profit financial institution offering deposit, loan, and other financial services.
Sarah opened a savings account at the Bank downtown.
Sara Rehman
Oct 21, 2023
Bank
Entity facilitating financial transactions, investments, and currency exchanges.
The Bank offered competitive rates for home loans.
Aimie Carlson
Oct 21, 2023
Bank
Regulated institution providing monetary services and wealth management.
As a business owner, Jake needed a Bank that offered robust commercial services.
Sawaira Riaz
Oct 21, 2023
Bank
Establishment handling deposits, credits, and financial instruments.
The Bank's new digital platform made online banking seamless.
Aimie Carlson
Oct 21, 2023
FAQs
Why choose a Bank over a Credit Union?
Banks might offer a broader range of services, advanced technology, or have more widespread branches.
Harlon Moss
Nov 07, 2023
Are funds deposited in a Credit Union as safe as in a Bank?
Yes, both are insured, but usually by different entities – NCUA for Credit Unions and FDIC for Banks.
Sawaira Riaz
Nov 07, 2023
What's the key difference between a Credit Union and a Bank?
Credit Unions are member-owned and not-for-profit, while Banks are shareholder-owned and for-profit.
Sawaira Riaz
Nov 07, 2023
Can anyone join any Credit Union?
No, Credit Unions have membership criteria, often based on community or occupation.
Sawaira Riaz
Nov 07, 2023
Do all Banks operate on a for-profit basis?
Yes, Banks operate to generate profits for shareholders.
Harlon Moss
Nov 07, 2023
How do Credit Unions support local communities?
They often sponsor local events, provide educational resources, and reinvest profits locally.
Aimie Carlson
Nov 07, 2023
Why do people prefer Credit Unions?
Personalized service, community focus, and potentially better rates are some reasons.
Aimie Carlson
Nov 07, 2023
Are Banks more widespread globally than Credit Unions?
Yes, many large Banks have international branches, while Credit Unions are often more localized.
Sara Rehman
Nov 07, 2023
Do Banks typically offer higher interest rates on deposits?
Not necessarily; Credit Unions often offer competitive or even higher rates due to their not-for-profit status.
Sawaira Riaz
Nov 07, 2023
Do Credit Unions offer online banking?
Yes, many Credit Unions provide comprehensive online and mobile banking services.
Aimie Carlson
Nov 07, 2023
Can I get a business loan from a Credit Union?
Yes, many Credit Unions offer business loans and services.
Sawaira Riaz
Nov 07, 2023
Are Credit Union fees generally lower than Banks?
Often, due to their member-focused, not-for-profit nature, Credit Unions have lower fees.
Aimie Carlson
Nov 07, 2023
Can I access ATMs easily with a Credit Union account?
Yes, many Credit Unions participate in shared networks, offering extensive ATM access.
Aimie Carlson
Nov 07, 2023
What's a significant advantage of joining a Credit Union?
Members often enjoy lower fees, better rates, and a more personalized experience.
Aimie Carlson
Nov 07, 2023
Are Banks more technologically advanced than Credit Unions?
Larger Banks might have more advanced tech, but many Credit Unions also offer modern digital services.
Sawaira Riaz
Nov 07, 2023
Which is older, the concept of a Bank or a Credit Union?
The concept of banking predates Credit Unions by several centuries.
Harlon Moss
Nov 07, 2023
How do Banks differ in size and operations?
Banks can range from small community banks to massive international corporations with varied services.
Janet White
Nov 07, 2023
What kind of accounts can I open at a Bank?
Savings, checking, CDs, investment accounts, and more, depending on the Bank's offerings.
Aimie Carlson
Nov 07, 2023
How do Banks generate profits?
Through interest differences, fees, financial services, and investments, among other avenues.
Sawaira Riaz
Nov 07, 2023
Can non-members access some Credit Union services?
Typically, core financial services are for members, but some outreach programs might be public.
Janet White
Nov 07, 2023
About Author
Written by
Sawaira RiazSawaira is a dedicated content editor at difference.wiki, where she meticulously refines articles to ensure clarity and accuracy. With a keen eye for detail, she upholds the site's commitment to delivering insightful and precise content.
Edited by
Huma SaeedHuma is a renowned researcher acclaimed for her innovative work in Difference Wiki. Her dedication has led to key breakthroughs, establishing her prominence in academia. Her contributions continually inspire and guide her field.
