Goal

Purpose

To earn profit for the bank's owners (shareholders).

All members of a credit union are considered shareholders. Credit unions do not make profits, but instead enjoy better rates than banks. 

Similarities

  • Accept checking and savings deposits
  • Make loans
  • Allow ATM withdrawals

Differences

  • Banks typically have more physical locations
  • Banks have more options
  • Banks tend to have longer hours and more flexibility
  • Banks typically have better technology
  • Credit unions are tax-exempt
  • Credit unions pay higher interest rates on deposits
  • Credit unions charge lower fees on checking accounts and ATM withdrawals
  • Credit unions are not-for-profit, and banks are for-profit organizations

Sources:

Adam Barone. How Banking Works, Types of Banks, and How To Choose the Best Bank for You. Dotdash Meredith. 19 August 2022.

Mitchell Grant. Credit Unions: Definition, Membership Requirements, and Vs. Banks. Dotdash Meredith. 24 February 2021.

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