Smart Shopping
Credit union vs bank: which is better for your money?
Where you keep your money affects the fees you pay and the rates you get. Here is how credit unions and banks really compare.
Banks and credit unions offer almost the same products: checking, savings, cards and loans. The difference is who owns them and how that shows up in fees and rates.
The main difference
Banks are for-profit companies owned by shareholders. Credit unions are nonprofit cooperatives owned by their members. MyCreditUnion.govrun by the federal regulator, explains how membership works.
How they usually compare
- Fees: credit unions often charge lower or fewer fees.
- Loan rates: credit unions are often competitive on auto and personal loans.
- Savings rates: varies; online banks often lead on high-yield savings.
- Branches and ATMs: big banks have more locations, though many credit unions share ATM networks.
- Technology: large banks usually have more polished apps.
Is your money protected?
Yes, at insured institutions. Banks are covered by FDIC deposit insurance and federally insured credit unions by the NCUA share insurance fundboth up to $250,000 per depositor or member, per institution, per ownership category.
How to choose
- List what you use most: branch, app, loans or savings.
- Compare fees and minimum balances.
- Compare loan APRs if you plan to borrow soon.
- Check insurance and membership requirements.
Frequently asked questions
Is my money safe at a credit union?
At a federally insured credit union, deposits are protected by the NCUA's share insurance up to $250,000 per member, per institution, per ownership category, similar to FDIC coverage at banks.
Can anyone join a credit union?
You need to meet the membership requirements, like where you live, work or study, but many credit unions have broad eligibility.
Are credit union loans cheaper?
Often, especially for auto loans, but not always. Compare the APR on each offer.
Can I have both?
Yes. Many people keep a bank account for convenience and use a credit union for loans or savings.
Whichever you choose, avoid the fees that eat your balance.