By: Vincent Mortensen
Some consumers are confused when it comes to banks and credit unions. There are even some that believe they are the same institution under a different name like Target is different from Walmart. Both are super stores, but different companies. This is not the case.
Below is a chart that explains the basic differences between banks and credit unions.
| Credit Union | Bank | |
| Structure | Non-profit Institution | For-profit Institution |
| Insurance | Up to $250,000 by the NCUA | Up to $250,000 by the FDIC |
|
Leadership
|
Volunteer Board of Directors elected by members of the credit union. | Paid Board of Directors voted in by stockholders that may or may not be customers of that bank. |
| Earnings | Net income is used to lower interest on loans and higher interest on savings. | Stock holders may receive a share of the profits through dividends. |
| Products | Full range of financial products and services. | Full range of financial products and services. |
| Service Delivery | Branches, online, ATMs, mobile | Branches, online, ATMs, mobile |
| Fees | Low to no fees | Fees usually apply |
Currently, I keep my money in a credit union and I like it very much. The loan rates are lower and savings accounts make a little higher interest than commercial banks. I have also been with a bank in the past and enjoyed their services as well. Whatever you decide to choose, you now have a better understanding on what your financial institution is all about. Good luck!
Financial Food for Thought 