Credit Union

A credit union is a member-owned financial cooperative that provides banking services such as savings accounts, loans, and credit cards to its members. Unlike traditional banks, credit unions are not-for-profit organizations, meaning they prioritize member benefits over profit. As a result, credit unions often offer better interest rates on loans and savings, as well as lower fees. Membership is typically based on common affiliations such as employer, geographic location, or organization.

Example

A teacher joins a local credit union that offers lower interest rates on auto loans compared to commercial banks, benefiting from the cooperative’s not-for-profit structure.