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When it comes to choosing between banks and credit unions there are many key differences in terms of ownership, interest rates, fees, customer service, insurance coverage, and accessibility.

First off, the key differences between a bank and credit union are that a credit union is a not-for-profit institutions and member owned, while a bank is a for-profit institution and owned not by its members but by stockholders. Since credit unions operate as nonprofit institutions, they can in turn offer higher interest rates on savings and checking accounts and CDs, and also offer lower interest rates on loans and credit cards. Since credit unions are member owned, this distinction allows members to be part owner of the credit union and this gives the members a say in the credit union’s decision and thus credit unions can provide services that are tailored to their members’ needs. In contrast, since banks are for-profit institutions they tend to have lower interest rates on savings and checking accounts and CDs, and usually have higher interest rates on loans and credit cards. Also since banks are not member owned but instead owned by the company’s stockholders, members as a result do not have any say in a bank’s decisions and thus banks cannot provide services that are fully tailored to their members’ needs.

Next, in terms of fees, credit unions usually have fewer and lower fees in contrast to banks. Most credit unions offer checks, withdrawals, and electronic transactions free of charge and many offer checking accounts with no minimum balance and without a monthly account servicing charge. And this distinct difference saves members hundred dollars a year in fees. In contrasts, banks levy major fees on everything monthly maintenance fees t...

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...t fewer branches with shorter hours and fewer 24-hour ATMs quickly accessible to its members. Credit unions also lack or have lower-quality online and mobile banking options in comparison to banks, making on-the-go banking either somewhat of a hassle or nonexistent. Even though credit unions lack in the area of providing greater accessibility to its members they are constantly improving their services and customer needs in response to the recent finical crisis, in which members are switching from banks to credit union, inundating credit unions with new members. Allowing these new members to take advantage of higher interest rates on saving or checking accounts, lower interest rates on loans or credit cards, lower and fewer fees, faster and personal customer service, insurance coverage safely insured by the NCUA, member owned institutions, and member focused banking.