At a glance Banks and Credit unions are very similar, both offering products such as personal loans, savings and everyday bank accounts - but what makes them different.
The real difference between Banks and Credit Unions is how they operate. Banks are for-profit, aiming to maximise profits for its shareholders. Credit Unions, on the other hand, are not-for-profit, distributing all profit back to its members through better rates and low fees.
At a Bank you are a customer, you have no voting rights and shareholders own and control how the bank operates. This can often mean the shareholders make decisions that benefit them and not the customer.
When you join a Credit Union you become a member. As a member, you are an owner of the Credit Union and are entitled to one vote, regardless of how much you deposit. This means you can have a say on how your Credit Union is run.
Another difference is the size of Banks and Credit Unions. Banks generally have a large branch network and customers have access to more ATM’s.
As Credit Unions tend to be more local, working on a smaller scale than most Banks, they usually have fewer branches and ATM’s. This often allows them to be able to offer a more personalised service. They also tend to have more of a focus on community, giving back to the communities they have branches in.
Banks and Credit Unions both have different advantages and choosing which one is right for you depends on your financial needs.