Credit union vs Bank

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Comparing a bank and a credit union

Today we are comparing credit unions to a banks. What’s the difference? Are credit unions safe? What are the advantages of a credit union? Do I have to choose one and not the other?

Fees of a Bank vs. Credit Union

When opening a checking or savings account, one of the first considerations is what are the fees? Most people have had a bad experience with a bank, or know someone that has-whether it was a pesky minimum balance fee, overdraft fees, or a mysterious charge you had to inquire about.

Many banks require you to maintain a minimum balance or you get a fee. It’s amusing when you think about it- don’t have enough money in your account? Let’s take some more out in hopes of remedying that. I had a friend that happened to once (or was it twice). I can only speak for my credit union, but it doesn’t have a minimum fee balance.

With that said, not all of my fee experiences with my credit union have been positive. I once had a business write me a bad check; my credit union took a fee out of my account to reimburse themselves of the inconvenience. So, I had to contact the client and not only get my money, but an additional fee as well. I don’t recall having to pay a fee when someone wrote me a bad check when I was with Bank of America years ago. Not sure what the policy is like there now. I left over a decade ago with no interest in going back.


This is the one area where my credit union was falling seriously behind. The mobile app and online experience was simply better with a traditional bank. When my credit union first got into the mobile app business, I initially had trouble logging in, scanning checks, and other annoying problems. However, that gap narrowed over the last year; I’m assuming due to complaints and feedback. I’ve noticed a SERIOUS upgrade in the user experience; of course, I don’t know how other credit unions apps compare. If you have any experiences leave them in the comments below. On the other hand, I believe my credit union was ahead of the curve with technology at the physical locations. They installed some great kiosks for depositing money, making withdrawals, as well as installing greater teller safety mechanisms and more. My local bank of a America looks pretty much the same way it did 15 years ago (except now the drive-in is completely shut and non-functional). Large banks do have greater investment dollars to spend on things like technology, so I’m sure they will always be mostly ahead in this regard.


I think this plays less of a role than it did in the past. Most people seldom go into a physical bank location (unless it is to discuss loans, close an account, or make a large withdrawal). With a large bank, you are definitely getting more accessibility; for example, more ATM machines on every corner. Your credit union, most likely confined to a local area, will not have as many compatible ATM’s.

In the rare instance you need to go in, you may have to drive a little further to get to your credit union. With my credit union, they are opening up more and more branches in our state, so I’m never too far from one.

Online banking is the future. I know lots of people opening accounts with Ally due to the better rates they offer and never stepping foot in an Ally bank. I remember over 10 years ago opening up an account online at a bank that had better rates; I never once stepped foot in it except to close the account.

Loans by a Credit Union

Typically, credit unions will offer better loan rates to its members. I know that after shopping around on my last car loan, my credit union gave me a better rate than the local banks would have. I’m sure there are some instances where a good credit score mixed with the right bank would beat out some credit unions.

Customer Service

This is largely up to the individual bank and credit union. However, the general consensus is that credit unions have better customer service due to serving a smaller customer base. I’ve found this to be true, I’ve never had an issue with customer service at my credit union.

What about Safety and insurance?

Are your deposits into a credit insured like a bank? It turns out that are. Up to 250K is insured by the National Credit Union Administration. Think of it like the FDIC for credit unions.

Business-How is it Run?

One of the main differences with a credit union is, if you have an account you are called a MEMBER; meanwhile, at a bank, you are a CUSTOMER. As a bank CUSTOMER, you don’t have any say in the every day business practices. A bank is there to make money for investors, it is a FOR PROFIT establishment. On the other hand, Credit unions are beholden to their members and their sole purpose is not for profits.


There is nothing stopping you from having an account at a larger/national bank and a credit union; that was the case for me in my past married life 🙂

I chose to use my credit union for my personal account (and still do), while our joint account was at Bank of America. Should you need greater access to physical locations or ATM’s, you’ll have it. Should you need the better loan offerings and higher savings rates of a credit union, you’ll have that as well.

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