The key distinction between credit unions and banks lies in their ownership structure and core mission.

  • Profit Motive: Banks are for-profit institutions. Their primary goal is to generate returns to shareholders. This can influence fees and interest rates.
  • Member-Owned Cooperative: Credit unions, on the other hand, are not-for-profit cooperatives. They are owned by their members. This cooperative structure means profits are returned to members in the form of lower fees, higher interest rates on savings, and lower interest rates on loans.

In essence, credit unions prioritize the financial well-being of their members, while banks answer to the profit expectations of their shareholders.