What is the difference between a credit union and a bank?

In honor of International Credit Union Day on October 20th, TruStone Financial wants to examine the differences between credit unions and banks. Financial institutions and the services they provide may seem similar at first glance, but after thorough comparisons and in-branch experiences – it’s not hard to see the credit union difference.

So, what is a credit union? Credit unions are not-for-profit organizations that do everything big banks can do like accept deposits, provide loans and offer a wide range of products and services – but as a member-owned institution, credit unions are completely member focused. That’s why profits are returned back to members in the form of reduced fees, higher savings rates and lower loan rates. Plus, since credit unions are member-owned your vote counts and is vital to the growth and success of your financial institution.

So, how do you become a member? To become a member of a credit union, you must be within the field of membership which is based on factors like your employer, family, geographic location or participation in things like your school or place of worship. Due to similar membership criteria, members often have shared interests, communities and values. That’s why credit unions take pride in engaging within the communities they serve by participating in community events, financial literacy courses and school donations. TruStone Financial is no exception – from college scholarship donations to local parades, the credit union is constantly involved in the communities you call home. It’s even how we got our nickname: your neighborhood credit union.

So, what do credit unions offer? Everything big banks do. From checking accounts and credit cards to loans for your home and vehicle, to mobile banking, credit unions use a cooperative structure that creates a cycle of mutual assistance towards the common goal of the financial well-being of all members.

Generally, credit unions tend to provide better customer service than banks due to the more personalized experience that is offered to members. For example, a member of TruStone Financial described his recent in-branch experience:

“The Lyn-Lake Minneapolis location is phenomenal. Dog friendly, has bottled water readily available, I am greeted by name and the young lady who assisted opening multiple accounts was fantastic. She went above and beyond expectation when she spent time going over our credit reports with suggestions and making sure we were becoming financially savvy. Completely transformed how I see the banks…at least the neighborhood credit unions! Bravo!!! Also, they literally sent thank you notes shortly after opening our accounts. Win.” – Christopher, member since 2016

So, do you want to experience the credit union difference? Stop in to your nearest TruStone Financial branch on International Credit Union Day on Thursday, October 20th for a celebratory treat. Whether you’re thinking about becoming a member or have been with us for years, we want to celebrate credit unions – and you!

 

Editor’s note: Segments of this article were taken from NerdWallet.com and mycreditunion.gov.