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




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


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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