Credit Unions

Credit unions are similar to banks, but with some key differences. Learn how credit unions work, how they compare to banks, and how to decide on which credit union is the best for your money.

Frequently Asked Questions

  • What is a credit union?

    A credit union is a not-for-profit banking and financial services organization. It exists to serve its members’ banking needs. Just like a bank, a credit union offers savings accounts, checking accounts, auto and personal loans, and a wide array of other financial services. Because a credit union is member-owned and member-focused, it can usually offer better rates and terms than a traditional, for-profit bank can.

  • What is the difference between a credit union and a bank?

    The two key differences between banks and credit unions are membership requirements and profit requirements. Banks serve the general public while credit unions serve their members. Banks are profit-seeking, while credit unions are not. These two differences affect how each delivers financial products and services. Banks generally provide a broader array of services (from deposit accounts to investment services), while credit unions offer better rates on deposit accounts and for consumer loans.

  • How to join a credit union?

    Credit union membership can be a perceived stumbling block for some, but most credit unions make the process as easy as possible. Contact the credit union you’d like to join and ask. Often membership requires affiliation with a group, charity, or occupation. Or the requirement may only be that you reside in a particular region. After you’ve determined eligibility, you’ll be asked to make a deposit and open a share account.

  • What is a credit union share-secured loan?

     A share-secured loan is a type of secured loan meant to help borrowers improve their credit histories and scores. The way it works is you deposit a fixed amount of money with the credit union. The credit union then funds the loan. As with a standard loan, you will make payments that the credit union will report to the credit bureaus. Your on-time payments will improve your credit. Along the way your deposit will earn interest.

  • What financial products do credit unions offer?

    Credit unions provide all the familiar consumer banking products and services: savings and checking accounts; certificates of deposit; home loans and refinances; personal and auto loans. Credit union members can also expect money transfers, mobile banking, direct deposit, and other convenient banking services.

Key Terms