Banks and credit unions have both been providing financial services to consumers for many, many years. From checking accounts, to mortgages, to investment services and more, credit unions and banks both offer financial options for personal or business needs. So that might lead you to wonder: What is the difference between a bank and a credit union?
Credit Unions Are Financial Cooperatives Owned By Their Members. Every member has a Share savings account that signifies your stake (or share) in Arbor Financial Credit Union. Being a credit union member makes you more than a customer. It allows you a voice in voting for things like the board of directors, and in doing so, an opportunity to help provide direction for Arbor Financial at large. Not bad, right? And as a member, any profits that are earned by the credit union are returned to benefit all members in the form of lower rates, higher savings yields, and lower fees. In other words, we take the money we make helping our members, and use it to help our members even more.
At Arbor Financial Credit Union, the board of directors is comprised of unpaid volunteers, and the owners are you who live, work, or worship in Michigan.
Banks Are Owned By Shareholders. Banks are companies, and like most companies, a bank aims to maximize profits for their shareholders. Their board of directors are paid for their input and work.
Both are Federally Insured up to $250,000. Both credit unions and banks are covered by government-backed protection and are safe and secure. At credit unions, your money is insured by the National Credit Union Administration (NCUA). Banks are federally insured by the Federal Deposit Insurance Corporation (FDIC).
Both have a Vast Network of ATMs. When you join a CO-OP ATM Network credit union (like Arbor Financial), you have access to over 30,000 surcharge-free ATMs across the US and Canada.
The guiding philosophy for the credit union movement is “people helping people.” That transcends simple customer service, as the pooled resources that make credit unions possible allow lower rates to members, which helps put things like cars, homes, and so much more in reach for members who might otherwise find it more difficult to achieve them. Your dreams may not always be big, but here and at credit unions worldwide, it’s our goal to make them possible.
As always, there’s so much information out there, and we’d always encourage you to look around for yourself. For more information, check out CUNA.org.