Most people keep their money in either a credit union or a bank. If you’re trying to choose between these financial institutions, we review credit unions vs. banks to help you decide which is a better place for your money.

What Is a Credit Union?

Credit unions are member-owned cooperatives. This means you (as a member) not only keep your money there, but also own a part of the corporation.

Credit unions do have membership requirements. Most often, these require you to be part of the surrounding community, although some credit unions have other requirements like a shared religious affiliation or employer.

Credit unions also require members to have a “share account”. A “share account” is a savings account and a “share draft account” is a checking account. The savings account has a minimum balance you must keep in the account to pay dividends. The minimum balance is usually very low ($5-$10) and easy to maintain for members.

Credit Unions vs. Banks

Credit unions and banks each have a distinct function and design. The table below outlines the major differences between credit unions and banks.

Credit UnionsBanks
Credit Unions are not-for-profit organizations.Banks are for-profit organizations with investors.
Credit unions require a membership.Banks do not require membership.
Members of a credit union must open a savings account and keep a low minimum in this account.Typically, consumers who apply for checking and/or saving accounts must make a minimum deposit.
Generally lower feesGenerally higher fees
The savings rate (interest) tends to be higher.The savings rate (interest) tends to be lower.

Branches are limited to your community. However, credit unions will often partner with other credit unions (Credit Unions Co-Op) to allow members access to ATMs with zero fees in other areas.

Access to branches is more widespread and can be both national and local.
NCUA InsuredFDIC Insured
Emphasis on customer service and the community.Emphasis on accessibility and ease of use. Typically have better technology.

Is a Credit Union Right for You?

Credit unions are popular for many reasons, including the lower fees. According to the Credit Union National Association (CUNA), these not-for-profit organizations serve 115 million members (or depositors) in the US. Below, we look more closely at the advantages and disadvantages of credit unions:

Advantages of Credit Unions

  • You have voting privileges as members, meaning that you have a say in the board of directors.

  • Credit unions tend to offer better rates, including lower rates on loans and higher rates on the money deposited.

  • Members are more likely to get approved for a loan.

  • There are typically no monthly maintenance fees, unlike at banks.

  • Because credit unions are smaller, they are more likely to provide exceptional customer service and create a stronger sense of community among members.

Disadvantages of Credit Unions

  • Larger banks often have an edge on technology.

  • Banks are able to provide numerous online services, such as

    • easy transfers between accounts

    • deposited money being immediately reflected in your account

    • 24-hour automated systems with chatbot.

  • Credit unions typically keep bankers’ hours, so you may not be able to reach anyone at night or on weekends.

  • Since banks have numerous locations, it’s easy to find an ATM. Credit union withdrawal and deposit options are more limited if you don’t want to incur fees.

How to Find Top Credit Unions

To find a top credit union in your area, visit You can also look at reviews online and consider what the community has to say about the financial institution. Since they look to serve the community, it’s best to listen to the target consumer.

Credit Unions vs. Banks: Our Final Takeaway

There are pros and cons to using either credit unions or banks. Keep the following list in mind when comparing credit unions vs. banks:

  • Savings rate

  • Fees

  • Branch locations

  • Online banking services

  • Lending rates

  • Financial products other than a checking/savings account

Your decision should be based on personal preference and determining which factors are most important to you.