Help Center

Home

Financial Terms and Glossary

Credit union

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.

Key points

• A credit union is a member-owned, not-for-profit financial cooperative.

• It offers banking services like loans, savings accounts, and credit cards.

• Credit unions typically provide better interest rates and lower fees than traditional banks.

Quick Answers to Curious Questions

How do credit unions differ from traditional banks?

Credit unions are not-for-profit, member-owned cooperatives, often offering better rates and lower fees, whereas banks are for-profit institutions.

What are the benefits of joining a credit union?

Members typically enjoy lower loan rates, higher savings rates, and fewer fees compared to traditional banks.

Who can join a credit union?

Membership is often based on shared affiliations, such as a common employer, geographic region, or membership in a particular organization.

scroll top