What’s the difference between a credit union and a bank?

A credit union and a bank are both financial institutions that provide checking and savings accounts, credit cards and other financial services, but they have some key differences in how they are run and organized.

Bank vs Credit Union Chart

Credit unions are member-owned. That means members have an active voice in how the credit union is run and the decisions the credit union makes. In contrast, banks are owned by their shareholders. Bank customers aren’t invited to shareholder meetings (unless they are also a shareholder), but all credit union members are regularly invited to the credit union’s annual meeting.

Another key difference is what the financial institutions do with their profits. Banks are for profit and need to pay their Board of Directors and shareholders. Since the goal is to make money, they may charge higher fees and offer lower savings rates. Credit unions, on the other hand, are not-for-profit. Any extra income they make goes back to the members in the form of better savings rates, lower loan rates, and reduced or waived fees.

Both credit unions and banks carry federal insurance for their members’ and customers’ money. Banks are insured through the Federal Deposit Insurance Corporation (FDIC), and credit unions are insured through the National Credit Union Administration (NCUA). The insurance limits through both agencies are the same.

Both credit unions and banks are safe places for your money, but we believe that credit unions are something truly special. A credit union like Stanford FCU cares about you as a person (and not just an account number) and will bend over backwards to find ways to say YES to your financial success. We put our members first, and we invite you to experience the credit union difference for yourself.

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