Credit Union vs. Bank — What's the Difference?
By Tayyaba Rehman — Published on November 29, 2023
Credit Unions are member-owned financial cooperatives, while Banks are for-profit institutions owned by shareholders.
Difference Between Credit Union and Bank
Table of Contents
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Key Differences
Credit Unions are financial cooperatives that prioritize the needs of their members. Members of a Credit Union typically share some common bond, like geographical location or employment. Banks, on the other hand, are for-profit entities that prioritize shareholder returns.
Credit Unions often offer lower fees and better interest rates to their members due to their not-for-profit status. Banks, in contrast, might charge higher fees and offer lower interest rates on deposits, as they aim to maximize profits for shareholders.
While both Credit Unions and Banks offer a range of financial services, the scope and variety might differ. Credit Unions might have a more limited range of products compared to larger Banks which offer a vast array of services globally.
In terms of governance, Credit Union members have a say in its operations, often through voting. Banks, especially larger ones, are typically governed by a board of directors and shareholders, with individual customers having little direct influence.
Both Credit Unions and Banks are regulated, but the overseeing bodies might differ. Credit Unions may fall under state or federal regulations, depending on their charter. Banks are generally regulated by federal authorities, like the Federal Reserve or the Office of the Comptroller of the Currency.
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Comparison Chart
Ownership
Member-owned
Shareholder-owned
Profit Orientation
Not-for-profit
For-profit
Governance
Members have voting rights
Governed by board and shareholders
Service Focus
Often localized with common bond
Broad, can be global
Regulation
State or federal
Primarily federal
Compare with Definitions
Credit Union
A cooperative offering banking services.
The Credit Union provided John with a lower-interest loan than commercial banks.
Bank
A for-profit entity holding public funds.
The Bank announced impressive quarterly profits this year.
Credit Union
A non-profit organization for financial services.
Due to its non-profit nature, the Credit Union had fewer fees.
Bank
An institution providing financial products and advice.
She visited the Bank to get advice on mortgage options.
Credit Union
A financial entity based on membership and common bonds.
Teachers in the district could join the local Credit Union.
Bank
A piled-up mass, as of snow or clouds; a heap
A bank of thunderclouds.
Credit Union
An alternative to banks prioritizing member benefits.
For her car loan, Emily preferred the Credit Union's rates over the bank's.
Bank
A steep natural incline.
Credit Union
A member-owned financial institution.
She joined the Credit Union because of its community-driven initiatives.
Bank
An artificial embankment.
Bank
The slope of land adjoining a body of water, especially adjoining a river, lake, or channel.
Bank
A large elevated area of a sea floor.
Bank
(Games) The cushion of a billiard or pool table.
Bank
The lateral inward tilting, as of a motor vehicle or an aircraft, in turning or negotiating a curve.
Bank
A business establishment in which money is kept for saving or commercial purposes or is invested, supplied for loans, or exchanged.
Bank
The offices or building in which such an establishment is located.
Bank
The funds of a gambling establishment.
Bank
The funds held by a dealer or banker in certain games, especially gambling games.
Bank
The reserve pieces, cards, chips, or play money in some games, such as poker, from which the players may draw.
Bank
A supply or stock for future or emergency use
A grain bank.
Bank
(Medicine) A supply of human fluids or tissues, such as blood, sperm, or skin, that is stored in a facility for future use.
Bank
A place of safekeeping or storage
A computer's memory bank.
Bank
A set of elevators.
Bank
A row of keys on a keyboard.
Bank
A bench for rowers in a galley.
Bank
A row of oars in a galley.
Bank
(Printing) The lines of type under a headline.
Bank
To border or protect with a ridge or embankment.
Bank
To pile up; amass
Banked earth along the wall.
Bank
To cover (a fire), as with ashes or fresh fuel, to ensure continued low burning.
Bank
To construct with a slope rising to the outside edge
The turns on the racetrack were steeply banked.
Bank
To tilt (an aircraft) laterally and inwardly in flight.
Bank
To tilt (a motor vehicle) laterally and inwardly when negotiating a curve.
Bank
(Games) To strike (a billiard ball) so that it rebounds from the cushion of the table.
Bank
(Sports) To play (a ball or puck) in such a way as to make it glance off a surface, such as a backboard or wall.
Bank
To rise in or take the form of a bank.
Bank
To tilt an aircraft or a motor vehicle laterally when turning.
Bank
To deposit in a bank.
Bank
To store for future use.
Bank
To transact business with a bank or maintain a bank account.
Bank
To operate a bank.
Bank
To arrange or set up in a row
"Every street was banked with purple-blooming trees" (Doris Lessing).
Bank
(countable) An institution where one can place and borrow money and take care of financial affairs.
Bank
(countable) A branch office of such an institution.
Bank
(countable) An underwriter or controller of a card game.
Bank
(countable) A fund from deposits or contributions, to be used in transacting business; a joint stock or capital.
Bank
The sum of money etc. which the dealer or banker has as a fund from which to draw stakes and pay losses.
Bank
Money; profit.
Bank
(countable) In certain games, such as dominos, a fund of pieces from which the players are allowed to draw.
Bank
A safe and guaranteed place of storage for and retrieval of important items or goods.
Blood bank; sperm bank; data bank
Bank
(countable) A device used to store coins or currency.
If you want to buy a bicycle, you need to put the money in your piggy bank.
Bank
(hydrology) An edge of river, lake, or other watercourse.
Bank
An elevation, or rising ground, under the sea; a shallow area of shifting sand, gravel, mud, and so forth (for example, a sandbank or mudbank).
The banks of Newfoundland
Bank
(geography) A slope of earth, sand, etc.; an embankment.
Bank
(aviation) The incline of an aircraft, especially during a turn.
Bank
(rail) An incline, a hill.
Bank
A mass noun for a quantity of clouds.
The bank of clouds on the horizon announced the arrival of the predicted storm front.
Bank
(mining) The face of the coal at which miners are working.
Bank
(mining) A deposit of ore or coal, worked by excavations above water level.
Bank
(mining) The ground at the top of a shaft.
Ores are brought to bank.
Bank
A row or panel of items stored or grouped together.
A bank of switches
A bank of pay phones
Bank
A row of keys on a musical keyboard or the equivalent on a typewriter keyboard.
Bank
(computing) A contiguous block of memory that is of fixed, hardware-dependent size, but often larger than a page and partitioning the memory such that two distinct banks do not overlap.
Bank
(pinball) A set of multiple adjacent drop targets.
Bank
A bench, as for rowers in a galley; also, a tier of oars.
Bank
A bench or seat for judges in court.
Bank
The regular term of a court of law, or the full court sitting to hear arguments upon questions of law, as distinguished from a sitting at nisi prius, or a court held for jury trials. See banc
Bank
A kind of table used by printers.
Bank
(music) A bench, or row of keys belonging to a keyboard, as in an organ.
Bank
(uncountable) slang for money
Bank
(intransitive) To deal with a bank or financial institution, or for an institution to provide financial services to a client.
He banked with Barclays.
Bank
(transitive) To put into a bank.
I'm going to bank the money.
Bank
To conceal in the rectum for use in prison.
Johnny banked some coke for me.
Bank
To roll or incline laterally in order to turn.
Bank
(transitive) To cause (an aircraft) to bank.
Bank
(transitive) To form into a bank or heap, to bank up.
To bank sand
Bank
(transitive) To cover the embers of a fire with ashes in order to retain heat.
Bank
(transitive) To raise a mound or dike about; to enclose, defend, or fortify with a bank; to embank.
Bank
To pass by the banks of.
Bank
To provide additional power for a train ascending a bank (incline) by attaching another locomotive.
Bank
To arrange or order in a row.
Bank
A mound, pile, or ridge of earth, raised above the surrounding level; hence, anything shaped like a mound or ridge of earth; as, a bank of clouds; a bank of snow.
They cast up a bank against the city.
Bank
A steep acclivity, as the slope of a hill, or the side of a ravine.
Bank
The margin of a watercourse; the rising ground bordering a lake, river, or sea, or forming the edge of a cutting, or other hollow.
Tiber trembled underneath her banks.
Bank
An elevation, or rising ground, under the sea; a shoal, shelf, or shallow; as, the banks of Newfoundland.
Bank
The face of the coal at which miners are working.
Bank
The lateral inclination of an aëroplane as it rounds a curve; as, a bank of 45° is easy; a bank of 90° is dangerous.
Bank
A group or series of objects arranged near together; as, a bank of electric lamps, etc.
Bank
The tilt of a roadway or railroad, at a curve in the road, designed to counteract centrifugal forces acting on vehicles moving rapiudly around the curve, thus reducing the danger of overturning during a turn.
Bank
A bench, as for rowers in a galley; also, a tier of oars.
Placed on their banks, the lusty Trojan sweepNeptune's smooth face, and cleave the yielding deep.
Bank
The bench or seat upon which the judges sit.
Bank
A sort of table used by printers.
Bank
A bench, or row of keys belonging to a keyboard, as in an organ.
Bank
An establishment for the custody, loan, exchange, or issue, of money, and for facilitating the transmission of funds by drafts or bills of exchange; an institution incorporated for performing one or more of such functions, or the stockholders (or their representatives, the directors), acting in their corporate capacity.
Bank
The building or office used for banking purposes.
Bank
A fund to be used in transacting business, especially a joint stock or capital.
Let it be no bank or common stock, but every man be master of his own money.
Bank
The sum of money or the checks which the dealer or banker has as a fund, from which to draw his stakes and pay his losses.
Bank
In certain games, as dominos, a fund of pieces from which the players are allowed to draw; in Monopoly, the fund of money used to pay bonuses due to the players, or to which they pay fines.
Bank
A place where something is stored and held available for future use;
Bank
To raise a mound or dike about; to inclose, defend, or fortify with a bank; to embank.
Bank
To heap or pile up; as, to bank sand.
Bank
To pass by the banks of.
Bank
To build (a roadway or railroad) with an inclination at a curve in the road, so as to counteract centrifugal forces acting on vehicles moving rapiudly around the curve, thus reducing the danger of vehicles overturning at a curve; as, the raceway was steeply banked at the curves.
Bank
To deposit in a bank.
Bank
To keep a bank; to carry on the business of a banker.
Bank
To deposit money in a bank; to have an account with a banker.
Bank
To tilt sidewise in rounding a curve; - said of a flying machine, an aërocurve, or the like.
Bank
A financial institution that accepts deposits and channels the money into lending activities;
He cashed a check at the bank
That bank holds the mortgage on my home
Bank
Sloping land (especially the slope beside a body of water);
They pulled the canoe up on the bank
He sat on the bank of the river and watched the currents
Bank
A supply or stock held in reserve for future use (especially in emergencies)
Bank
A building in which commercial banking is transacted;
The bank is on the corner of Nassau and Witherspoon
Bank
An arrangement of similar objects in a row or in tiers;
He operated a bank of switches
Bank
A container (usually with a slot in the top) for keeping money at home;
The coin bank was empty
Bank
A long ridge or pile;
A huge bank of earth
Bank
The funds held by a gambling house or the dealer in some gambling games;
He tried to break the bank at Monte Carlo
Bank
A slope in the turn of a road or track; the outside is higher than the inside in order to reduce the effects of centrifugal force
Bank
A flight maneuver; aircraft tips laterally about its longitudinal axis (especially in turning);
The plane went into a steep bank
Bank
Tip laterally;
The pilot had to bank the aircraft
Bank
Enclose with a bank;
Bank roads
Bank
Do business with a bank or keep an account at a bank;
Where do you bank in this town?
Bank
Act as the banker in a game or in gambling
Bank
Be in the banking business
Bank
Put into a bank account;
She deposites her paycheck every month
Bank
Cover with ashes so to control the rate of burning;
Bank a fire
Bank
Have confidence or faith in;
We can trust in God
Rely on your friends
Bank on your good education
I swear by my grandmother's recipes
Bank
A financial institution offering deposit, loan, and other financial services.
He went to the Bank to open a new checking account.
Bank
A regulated entity granting credit and accepting deposits.
After his paycheck, he deposited money into the Bank.
Bank
A cornerstone of the modern financial system.
The Bank's role in the economy cannot be underestimated.
Common Curiosities
What is the main difference between a Credit Union and a Bank?
Credit Unions are member-owned cooperatives, while Banks are shareholder-owned for-profit entities.
Who owns and governs a Credit Union?
Credit Unions are owned and governed by their members.
Can anyone join any Credit Union?
No, Credit Union membership often requires meeting certain criteria like living in a particular area or working at a specific company.
How do Banks generate profits?
Banks generate profits through interest rate differences, fees, and various financial services.
Do Banks offer more services than Credit Unions?
Larger Banks may offer a wider range of services than smaller Credit Unions, but it varies by institution.
Are Banks and Credit Unions regulated?
Yes, both are regulated, but Credit Unions might be under state or federal regulation, while Banks are often federally regulated.
Do both Credit Unions and Banks offer loans and deposits?
Yes, both Credit Unions and Banks offer a range of financial services including loans and deposits.
Why might someone choose a Credit Union over a Bank?
People might choose a Credit Union for its member-focused services, lower fees, and better interest rates.
What's a common bond in the context of a Credit Union?
It's a shared characteristic among members, like employment or location, which qualifies them for membership.
Are the services at Credit Unions technologically advanced like Banks?
While Banks might have more advanced tech platforms, many Credit Unions also offer modern digital services.
How does governance differ between a Credit Union and a Bank?
Credit Union members have a say in its operations, while Banks are governed by a board and shareholders.
How are the rates at Credit Unions compared to Banks?
Credit Unions often offer better interest rates and lower fees due to their not-for-profit status.
How safe are deposits in Credit Unions and Banks?
Both are generally safe, with deposits often insured up to certain limits.
How do Credit Unions support local communities?
Credit Unions, being community-focused, often reinvest profits locally and support community initiatives.
Are there global Credit Unions like global Banks?
While Banks can operate globally, Credit Unions are typically more localized.
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Written by
Tayyaba RehmanTayyaba Rehman is a distinguished writer, currently serving as a primary contributor to askdifference.com. As a researcher in semantics and etymology, Tayyaba's passion for the complexity of languages and their distinctions has found a perfect home on the platform. Tayyaba delves into the intricacies of language, distinguishing between commonly confused words and phrases, thereby providing clarity for readers worldwide.
