Credit Unions

Last updated: March 28, 2016

What Is the Difference Between a Credit Union and a Bank?

Banks and credit unions offer similar services. Both offer saving and checking accounts, loans, mortgages, and bill payment.

However, some major differences exist between the two institutions. There is an easy way to think about these differences.  

A Credit Union is like a local co-op, while a bank is like a business.

  • Credit unions are member owned and not-for-profit. 
  • Its members democratically control its operations.
  • Like a co-op, they have a local interest. Any profit from a credit union is given back to its members.

A Bank, however, caters to its investors and is a for-profit corporation.

  • A bank’s earnings are paid back to its investors. In this way it is like a business.
  • Banks have customers, not members. The customers do not have votes when it comes to running the bank.

Some banks can act in similar ways to credit unions. Community banks can be like a credit union because they are usually locally owned.  

  • A board, who may live in the community, runs the bank. The major difference between a community bank and a credit union is who calls the shots.

Some people choose a credit union or community bank because they believe in investing their money locally and value the personal customer service often associated with these institutions. Others prefer some of the convenient features (for example: multiple and nationwide locations) larger banks can offer.

To find a Credit Union in Kansas visit the Kansas Department of Credit Unions