What's the difference between a bank and a credit union?
A credit union is a not-for-profit financial institution owned and controlled by the people who use its services. These people are members. Credit unions serve groups that share something in common, such as where they live, work, are educated, or go to church. These groups make up a credit union's field of membership.
Deposits are insured up to $250,000. Credit unions exist to provide a safe, convenient place for members to save money and to get loans at reasonable rates. Like other financial institutions, credit unions are closely regulated. The National Credit Union Administration, an agency of the federal government, insures deposits of credit union members at more than 10,000 federal and state-chartered credit unions nationwide.
What makes a credit union different from a bank or savings and loan?
Like credit unions, banks accept deposits and make loans; but unlike credit unions, banks are in business to make a profit. Banks and savings and loans are owned by groups of stockholders whose interests include earning a healthy return on their investments.
Credit Unions |
Banks |
|---|---|
|
Not-for-profit |
Profit-oriented |
|
Profits return to members as lower loan rates, higher deposit rates, & lower/fewer fees |
Return profits to a small group of stockholders |
|
Invests directly back to members |
Invests in corporate bonds or the stock market |
|
Serves a specific field of membership |
Serves general public |
|
Members "own" a stake in the organization |
Controlled by stockholders and paid officials |
|
Member service-driven |
Profit-driven |
|
Federally insured by NCUA |
Federally insured by FDIC |
|
Volunteer member-elected Board of Directors represents interests |
Paid Board of Directors represents owners; customers without voting privileges |
Who can join?
FreeStar Financial Credit Union accepts membership from all those who live, work, worship or are educated in the State of Michigan.
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