What is the difference between a Credit Union and a Bank? Great question!
Credit unions are not-for-profit, member owned financial cooperatives that promote savings to improve member’s lives. Members at a Credit Union have a voice in the direction of the Credit Union. Most credit unions membership consists of people from various employers, schools or counties. Banks are for-profit financial corporations who are focused on making a profit for the Bank. Stockholders at banks expect a return on their investment, where as credit union’s board of directors are all volunteer (they don’t get paid) and are elected by the membership.
Unlike banks, credit unions exist solely to serve their members, not to pay stockholders. Any earnings DOCO makes are returned to the membership in the form of lower interest rates on loans and higher dividends on deposits. A Credit Union insures your account up to $250,000 through the National Credit Union Association (NCUA). Banks are insured by the Federal Deposit Insurance Corp. (FDIC) for the same amount, both are U.S. government agencies.
Hopefully this has helped with the confusion on the difference between a bank and a credit union. It is important to know what both offers so you can make a sound, decision for your financial needs. There is a common misconception that only teachers can join DOCO Credit Union. This is not the case. Our field of membership has opened up beyond just teachers. If you are interested in joining the Credit Union, please check us out on our website www.dococu.com or call 1-800-227-9180 for more details and if you’re eligible to join.