Credit Unions VS. Banks. What’s the Difference?

There are 10 financial institutions in Escanaba alone. Some are Credit Unions and some are Banks, but what’s the difference between them? Although we offer similar products and services, there are some major differences between us.

  1. The difference between Members and Customers.

When you open an account at Delta County CU or any other credit union you become a member and part owner! So you’re more than just a customer. You’re an owner and that means you have a say in how the credit union is run, as opposed to being owned by stockholders at banks. As a member, you elect our volunteer Board of Directors and can even run for an open position if you are up for it! Members of the board devote a notable amount of time overseeing operations of the credit union and don’t receive any compensation. We as credit union employees are very grateful for our board members as they lend a helping hand in making credit unions better for our members.

  1. Credit Unions are Not-for-Profit

Because we offer the same products and services as banks and other financial institutions, you may think there’s nothing different between them. However, credit unions are not-for-profit and are here to help people, not turn a profit. That’s why you see credit unions offering lower loan rates, lower services fees, and higher interest on share certificates and savings accounts.

  1. NCUA VS. FDIC

Credit Unions are federally insured by the NCUA (National Credit Union Administration) meaning your savings is federally insured to at least $250,000 and backed by the full faith and credit of the United States Government. Banks are federally insured by the FDIC (Federal Deposit Insurance Corporation) meaning each depositor is insured to at least $250,000 backed by the full faith and credit of the United States Government.

  1. Credit Unions are all about their members

All Credit Unions live by our philosophy “People Helping People.” Nationwide credit unions are dedicated to helping their communities, offering financial counseling, helping youth expand their financial education, and giving back profits to their members even though we aren’t required to. Under the Community Reinvestment Act banks are required to do good works. Credit unions do good works to strengthen our relationship with our members!

These few points only scratch the surface of the differences, but in close, credit unions are all about the member and we will try as hard as we can to get you on the right financial track and offer you the best service we possibly can.