What’s the difference between a bank and a credit union?
What is the difference between a bank and a credit union?
Submitted by anonymous.
Banks and credit unions serve similar roles in our financial system. Both hold our deposits and make investments to raise money to lend to businesses and individuals.
In general, banks are for-profit businesses. Their profits benefit their shareholders. This is one of the main differences between the two types of institutions. Credit unions are nonprofit entities where you become a “member” (actually a shareholder) when you open an account. While they offer the same services as most banks, they often offer lower fees and higher interest rates on accounts.
I am a fan of banking in your own community (that’s how we use our dollars to create the community we want) and generally recommend credit unions or community banks.
Saundra Davis is a nationally recognized financial coach and educator. Her experience in the U.S. Navy, where she made every money mistake possible, and her 20 years serving community-based organizations led her to the reality that the best way to help people find a path out of poverty is to help them become their own financial expert.