Credit Union vs. Bank

Nov 7, 2011 by

Big U.S. banks are taking a lot of heat for allegedly trashing the country’s economy, then sucking up billions in taxpayer bailout money, all while maintaining compensation unfathomable to 99% of Americans. Organized campaigns like Bank Transfer Day have urged Americans to move accounts from Big Banks to credit unions, partly as a revolt.

Money and Emotions Don’t Mix Well

Regardless of your feelings toward Big Banks and Wall Street, I encourage you to understand all the factual differences between banks and credit unions before acting.

Credit Unions

Credit unions are cooperatives, owned and controlled by members. In contrast to banks, a credit union’s accountholders, or members, are the credit union’s owners. Shareholders own banks. Credit union members elect a board of directors based on the one-member-one-vote principle. The member with the smallest deposit at a credit union has the same voting power as the member with the largest deposit. U.S. credit unions are not-for-profit, tax-exempt organizations, and community development is part of many credit union’s mission.

Almost all credit unions have deposit insurance up to $250,000–same as the FDIC–backed by the federal government through the National Credit Union Share Insurance Fund. An easy-to-use tool on the National Credit Union Administration’s website will tell you whether deposits at a particular credit union are insured.


The menu of accounts, loans, CDs, and other products don’t differ, generally, between banks and credit unions. Check out a specific institution to judge whether it offers what you want. Credit unions often don’t have the widespread ATM networks offered by big banks.

Where’s Our Money?

All of our cash is in federally insured bank accounts. I am getting more interested in credit unions. Any decision I make to move accounts will be based on products, fees, service, rates, and convenience.

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