Should You Work with a Credit Union or Bank?

There are a lot of things to keep in mind when you're deciding on a safe place to keep your hard-earned money:  your lifestyle, values, goals, life events and more.

Many people choose to work with big banks because they're recognizable, have convenient nationwide locations, and offer some of the most advanced digital and mobile banking services.

But another option to consider, and one that is quickly growing in popularity, is credit unions.

Credit unions offer the same level of security for your money as banks do, but are more community-based than they are national.

The choice is ultimately a personal one, but credit unions  take the cake when it comes to providing positive experiences for members.

Here's the proof!

According to the 2016 American Customer Satisfaction Index (ASCI) Finance and Insurance Report, credit unions come in first place for overall customer satisfaction for banking services. 

Outranking banks for superior customer service is not all that surprising when you consider the core mission of credit unions is to serve its members. In fact, that strong member-focused mindset is one of the key characteristics that set credit unions apart from traditional banks.

How else are credit unions different? Read on to find out!

The difference between credit unions & banks

From the outside, credit unions and traditional banks can look pretty similar. They both offer an array of financial products and services, such as checking and savings accounts, loans and mortgages, credit cards and more.

It is the details within those products and services, along with a handful of other aspects like ownership and organizational structure, which differentiate the two.

Learning about what banks and credit unions have in common – and what they don't – is an important step in deciding which is best for you.

Here are a few areas of comparison – some of which show credit unions as being the bigger bang for your buck.


One of biggest aspects of what truly makes credit unions and banks different is how they are organizationally structured: not-for-profit vs. for-profit.

Credit unions are not-for-profit. This means credit unions do not exist to make a profit. Instead, they focus much more on the well-being of members.

Banks are for-profit, which means they exist mainly for the purpose of generating a profit.

This structural difference plays a large role in how each of these financial institutions operates.

For instance, credit unions' not-for-profit standing means they return their earnings to members rather than shelling out the money to shareholders like banks do.

Credit union members see these profits come back to them in the form of lower interest rates on loans and credit cards and higher interest rates on savings accounts. This means there are typically more money-saving opportunities at credit unions than at banks.


Members, customers and shareholders – oh my!

Credit unions have members and are owned and operated by these members. Essentially, credit union members are both customers and owners.

Banks have customers and shareholders. The customers have no ownership rights. Instead, ownership falls to the shareholders.

Community focus & customer service

There is no 'U' in bank, but there certainly is in credit union! Credit unions pride themselves on making people a priority. They are community-based and make an effort to support their local economies. 

Banks, on the other hand, have a history of caring more about the satisfaction of their shareholders than of their customers. Banks rely on the money they make from their customers to pay their shareholders.

Another plus for credit unions is that they have an honest approach to helping members be wise with their money.

One of the many ways they do this is by providing financial education opportunities, which can be especially beneficial for people who don't know a lot about certain financial products or for students who are w­­orking on becoming more financially independent.

Financial education resources may vary between each credit union, but you can always find some helpful financial literacy resources for free on the Credit Union National Association website.


Credit unions are run by a board of volunteers. The volunteers who serve on the board are chosen through a one-member, one-vote election. This way, each member has an equal voice in deciding who represents their credit union.

Banks are a little different in this respect. The board that oversees a bank's policies is elected by its shareholders – who are not required to be a customer of the bank. The weight of each shareholder's vote depends on how many shares they own: the more they own, the more their vote counts.

Comparing credit unions to banks can be a lot like comparing apples to apples. There are many similarities, but one may taste better to you over the other based on your personal preferences.

If you're finding it difficult to decide, cuLearn is here to help. Partner with one of cuLearn's networks or lenders today.

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