A credit union is member-owned and nonprofit, which often means lower fees and better rates than a bank, though banks may have more branches and tech.
Credit union
- Member-owned nonprofit.
- Lower fees and loan rates.
- Higher savings rates.
- Deposits insured by NCUA up to $250,000.
Bank
- For profit.
- Larger ATM and branch networks.
- More tech features.
- Deposits insured by FDIC up to $250,000.
Rates
NCUA data show credit unions’ average auto loan rates are lower than banks’.
Membership
You must meet eligibility criteria.
Structure and numbers
Credit unions are not-for-profit, member-owned cooperatives, while banks are for-profit and answer to shareholders. In the US, the NCUA insures credit union deposits up to 250,000 USD per depositor per institution, the same level as FDIC for banks.
- The NCUA reported that credit unions in the US had over 140 million members and about 4,600 federally insured credit unions in 2023.
- Credit unions on average pay higher savings rates and charge lower loan rates and fees. NCUA data shows average auto loan rates are often lower by around 1 percentage point.
- Banks typically offer more branches, ATMs and advanced digital tools.
Membership and choice
Credit unions require membership based on employer, location, association or family ties, and some open membership to anyone who joins a partner association for a small fee. Many credit unions share ATM networks, like CO-OP. Compare account fees, rates, app quality and loan products. Business services and international banking are usually stronger at large banks.
Structure and numbers
Credit unions are not for profit cooperatives owned by members, while banks are for profit businesses with shareholders. Federally insured credit unions are covered by the NCUA up to 250,000 USD per depositor, like FDIC coverage at banks. Credit unions often offer lower loan rates and fees. In the US there are about 4,600 credit unions serving over 140 million members.
Membership and choice
Credit unions require membership based on employer, location or association. Banks may have more branches and advanced apps. Compare rates, fees and ATM access.
Costs and rates
NCUA data show credit unions had average auto loan rates 1 to 2 percentage points lower than banks in many periods. Credit unions charge lower fees; the average checking account fee is lower. Banks have broader branch networks, with the largest four banks holding about 40 percent of US deposits. Federal credit unions cap interest at 18 percent on most loans.
Services to compare
Check mobile app quality, ATM networks (the CO-OP network offers 30,000 surcharge free ATMs), online banking tools, business accounts, mortgages and savings rates. Credit unions require membership, but many accept anyone who joins an affiliated association for a small donation. Both are insured to 250,000 USD per depositor.
Based on data from the National Credit Union Administration and the FDIC
