What is a Credit Union?

Ever wonder what makes a credit union different from a bank? Credit unions offer many of the same products and services as banks, but have a very different business model and background. Read on to see if you knew these 5 facts about credit unions.  

What is a Credit Union?

May 25, 2016

What is a Credit Union?

Ever wonder what makes a credit union different from a bank? Credit unions offer many of the same products and services as banks, but have a very different business model and background.

Read on to see if you know these 5 facts about credit unions.

1. Not-for-profit

Credit unions are not-for-profit institutions. Unlike profit-focused banks that have stockholders to appease, credit unions are cooperatives owned solely by its members.  Therefore, credit union profits are reinvested or given back to members, leading to fact number 2.

2. Fewer or lower fees

Members reap the benefit of credit union profits in the form of lower fees than banks and better rates on loans. Many credit unions have lower or no minimum balance requirements on checking or savings accounts, and some even offer CashBack with your debit card.

3. Member-based

To use a credit union, you must become a member. People can qualify for membership in a variety of ways according to the institution’s policies. Generally, people can become members through their employer, professional organizations, church, or a referral from friends or family. If you don’t know whether you qualify for membership, don’t worry! Credit union staff members are happy to help determine eligibility for membership.

4. “People Helping People” philosophy  

Credit unions focus on their members and believe in the motto “People Helping People”. As community-focused financial institutions, credit unions believe in supporting their communities through financial services, volunteering, and supporting local businesses.

5. Volunteer board of directors

In contrast to banks that pay their board members, credit unions are governed by a volunteer board of directors. Each year, the credit union runs an election for board positions. All members have the right to vote, and each vote has equal weight. This board is usually made up of people from the community who are credit union members.

See the credit union difference by becoming a member today. With personal service, a commitment to community, and products and services to fit your needs, a credit union is there for you when you need it most.

Did you know all of the facts above already, or did you learn something new? Which credit union fact is your favorite? Let us know below!

Over 1,000 Ways to Become a Member

Did you know our field of membership contains over 1,500 clubs, organizations and employers? Check out the list to see how you can qualify for membership! 

See The List

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Equal Housing LenderThis credit union is federally insured by the National Credit Union Administration.

Redstone is an Equal Credit Opportunity Lender.

This content is provided for informational and educational purposes only and considered accurate as of the date posted. Views and opinions expressed in comments do not constitute an official endorsement by Redstone Federal Credit Union® or its affiliates. Redstone encourages you to seek professional advice for your personal situation before making any financial decision and is happy to assist you at any of our branch locations.

Must be RFCU® member to obtain or use any product or service. Must open a share savings account to join RFCU. A $5 minimum balance is required to open a share savings account and must be maintained in the share savings account at all times. Age and other restrictions may apply.