What is the major difference in a bank and a credit union?

Answer 1

Here is a link to a website that can explain the technical differences between banks and credit unions:

http://www.creditunion.coop/what_is_a_cu.html

As a consumer, you will not see many differences. The main difference that will impact you is a credit union's field of membership, which defines who can join the credit union. Banks can serve anyone, but credit unions have a defined field of membership (FOM). The FOM can be company-based, where only the employees of the company can join the credit union, or it can be community-based, where people who live in a particular geographic area can join the credit union. There are also some FOMs that are association-based for people who belong to a specific church or work in an industry (such as airline pilots or healthcare workers).

Here is a link to help you find a credit union you are eligible to join:

http://www.creditunion.coop/cu_locator/index.html

Hope this helps. Good luck!

Answer 2

Credit Unions are owned by the people that use them. Because they are there to serve the members of the credit union and not outside shareholders they are given non-profit status by the government.
Because they are owned by the members, it does credit unions no good to charge excessive fees for the sake of bringing in money, so their fees are typically lower than banks for NSF checks and services. Usually they try to only cover their cost of doing something (like wire transfers where they have to pay a fee, they just pass it on to you). Other fees like those on NSF checks go towards processing, but also serve to discourage people from abusing the system. This protects other members against the fraudulent actions of a few people. As for other fees that banks charge for services, if it doesn't serve a purpose, credit unions typically eliminate the fee.
Credit Unions also tend to pay higher interest (Dividends) on deposits and CDs and their rates are very competitive on loans.
My personal opinion too is that you get better personal service at credit unions, since they are there to serve you, not to make money. At least this has been my experience with the two places I bank (one a regional bank and the other a large credit union).

Answer 3

Banks are privately owned (usually by people who buy stock in them) and thus are out to make a profit. That's why they have so many fees.

Credit Unions are member owned. In other words the people who deposit money in them are the owners. That's why its not a savings account but a share account. Credit Unions usually don't charge ridiculous fees. Credit Unions rock! I'm still a member of the one I joined when I was 20, eventhough I live 500 miles from the nearest branch.

Answer 4

The primary difference is banks are 'for profit' businesses and credit unions are non-profit organizations. Any profit a credit union makes is paid back to members in the form of reduced fees or a member's dividend, in cash.

Answer 5

i could bypass with the credit Union. The min on their savings account is many times very low, many times 25 greenbacks. A CU is actual a non earnings so the revenue are poured back into the CU. Banks have boards and shareholders that they are beholden to.

Answer 6

Banks are typically profit making organizations and credit unions are typically "member" owned organizations.