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Credit unions and banks offer similar financial services, but there’s a big difference in the way they operate. With the numerous advantages of the credit union, it’s no wonder why they are gaining in popularity.

Customer vs. Member

At a credit union, you’re a member and not a customer. Your membership is what establishes you as a share owner in the financial institution. It also gives you a right to vote for the credit union’s board of directors who help manage the credit union. Banks are owned and controlled by stockholders and customers have no say in how the bank is operated.

Deposit Insurance

At U.S. banks, deposits are insured up to at least $250,000 by the Federal Deposit Insurance Corporation (FDIC). Similarly, credit union deposits are insured for the same amount by the National Credit Union Administration (NCUA). Both are independent agencies of the United States government and backed by the full faith and credit of the United States government.

Shared Branching & ATMs

Since credit unions tend to be smaller, community focused financial institutions with fewer locations compared to national banks; they usually participate in ATM networks which give members surcharge-free access to thousands of ATMs throughout the U.S. as well as shared branch networks. First Florida Credit Union participates in the same network to allow members ease of access to their money nationwide and free of charge.

Advantages of the Credit Union

Since credit unions are not for profit, they can return earnings to the members in the form of better rates and lower fees. With banks, they are for profit corporations with declared earnings paid to stockholders instead. Also, credit unions are exempt from many taxes that banks have to pay which help keep their costs down.

Credit unions also reflect a superior level of customer service since their institutions are organized solely to serve the interests of its membership.

Source: Cash Money Life