The Credit Union Difference
Credit Unions vs. Banks
| |
Credit Unions |
Banks |
| Purpose |
For people, not profits |
For profit |
| Ownership |
All Members |
Private investors & stockholders |
| Decision |
Democratically controlled by members |
Controlled by a paid Board & officials |
| Profits |
Returned to members as fewer/lower fees, better interest rates |
Returned to stockholders |
| Products |
Savings & Checking Accounts, Loans, etc. |
Savings & Checking Accounts, Loans, etc. |
Aren’t Credit Unions and Banks the Same?
Yes, and no. Credit unions and banks are both financial institutions that offer remarkably similar services. However, our organizational structures and the agencies that regulate us are different. We both insure your savings up to $250,000 (no worries there) and we are both required to meet strict government regulations. Even though credit unions are considered “tax exempt”, it’s not a free ride. We’re still responsible for things like paying property taxes for our branch locations and making sure our employees’ payroll taxes are properly deducted at the local and state level.
In the beginning, credit unions were seen as a kind of idealistic, yet practical, experiment that allowed members to combine their savings and lend to each other. Over time, the success of this “experiment” became apparent, as credit unions grew to become a common, trusted financial institution. One of the biggest reasons for our success has been the goal of keeping our members financially independent by helping them learn to save and borrow responsibly. In Pennsylvania alone, credit union members saved an average of nearly $250 per household in 2019. It’s hard to walk away from savings like that!
We could go on forever about credit unions and all the benefits of becoming a member, but you don’t have to take our word for it. Visit the link below to learn more about why we love what we do!
iBelong.org