What Is A Credit Union?
A credit union is a member-owned, not-for-profit financial cooperative that provides financial services to its members, including savings and checking accounts, loans, mortgages, online banking, bill payment, and more. Although the function of a credit union is quite similar to a bank, there are some crucial differences:
People who bank at a credit union are known as members, and each member (regardless of how much money they have at the credit union) is an owner of the credit union. People who use a bank's services, on the other hand, are known as customers, and customers have no ownership interest in the institution.
A credit union is a not-for-profit cooperative, so each member/owner can vote for board members. Members can also be elected to the board, though they will not be paid for their services. A bank, on the other hand, is an institution owned and controlled by stockholders.
Because volunteers form a credit union's board, the members reflect the diversity of the people using the credit union. Credit unions are working to serve their members, reflecting the interests of the community, while banks are working to maximize their profits, balancing financial strategy with customer satisfaction. Credit unions also work with other credit unions to share resources, while banks often engage in competition.
Credit unions offer all essential banking services. The services offered at credit unions and banks are quite similar, however credit unions do offer some advantages. Because they are not-for-profit cooperatives, credit unions typically have lower fees and loan rates, and many members appreciate that their services are tailored to the local community's needs.
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Are you interested in joining a credit union? Be sure to check out BluCurrent, a credit union local to SW Missouri that has been building better lives within the community since 1929.