Banks vs Credit Unions
Banks and credit unions both hold your money and help you move it. They are more similar than different, but their structure can affect fees, rates, and experience.
The short version
The simple version:
Banks are for profit businesses. Credit unions are member owned cooperatives. Both can be safe and useful; the details matter more than the label.
For everyday banking, the best choice is often the one with lower fees, better access, and tools you actually use.
How they are structured
- Owned by shareholders
- Operate for profit
- Often larger with more branches and ATMs
- May offer wider product selection
- Owned by members (customers)
- Not for profit
- Often smaller and community focused
- May have membership requirements
What this affects
Structure can influence fees, interest rates, and customer service, but it does not guarantee anything by itself.
Rates, fees, and access
Credit unions often offer slightly better savings rates and loan rates, though this varies.
Credit unions often have fewer or lower fees, but many banks also offer low fee accounts.
Banks may have more branches and ATMs; credit unions often use shared ATM networks.
Reality check
A great credit union can beat a bad bank, and a great bank can beat a bad credit union. Judge the specific institution, not the category.
Safety and insurance
Banks use FDIC insurance to protect deposits up to $250,000 per depositor.
Credit unions use NCUA insurance, which provides the same coverage limits and protection.
Key point
From a safety perspective, FDIC and NCUA insurance make banks and credit unions equally secure for everyday deposits.
How to choose
Look for low or no monthly fees
Check ATM access where you live and travel
Review mobile app quality and features
Confirm FDIC or NCUA insurance
Choose the option that fits how you actually use money
Common misconception
“Credit unions are always better” and “banks are always worse” are both oversimplifications. The account details matter more.
Key Takeaway
Banks and credit unions both do the core job of banking well. Focus less on the label, and more on fees, access, tools, and how the account fits your day to day life.