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

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Checking and savings accounts, CDs, teller windows, ATMs, loans, mortgages, debit and credit cards – to the casual observer, credit unions and banks aren’t much different. But for a savvy saver like you? The small differences add up to smarter ways to manage funds.

One of the most notable differences between credit unions and banks is their eligibility requirements. Most credit unions are based on community or employment. When you join one, you become a partial owner of the credit union. This means when you deposit money at a credit union, you’re actually buying shares.

That’s right. A credit union’s “not-for-profit” status means that all profits are distributed right back to members through better rates on loans or mortgages. It also means that credit unions can typically charge lower fees for services like online banking or ATM withdrawals.

Credit unions also offer competitive rates on CDs and saving accounts. And they tend to offer the best rates on credit cards, too. All this and the additional advantage of being locally owned (with notably better customer service) give credit unions the consumer edge over banks, big or small.

For more information about how credit unions differ from banks, click here for a short presentation from Hank the Talking Piggy Bank. He knows his stuff.