Bank and Credit Unions

by Daniel Morris Content Writer

Banks and credit unions are financial institutions that provide financial support to their customers .Both of them facilitate bank loan, mortgages and loan credit. Both the institutions charge interest rates for loan taken.
Though banks and credit union operates on the same parameter, but they have their different roles to serve their purpose. Banks operates according to its norms and regulations and credit union work according to their own norms.

Here are some listed differences between the Banks and Credit Union:

•    In terms of profit making: Banks aims to make profits through its customers by charging the higher interest rates on loan given to its customers. They are profit based institution which aims to provide profits to its share holders. On the other hand credit unions are non – profit based institutions, which aims to provide their customers the financial support at any cost.

•    In terms of ownership: Customers in credit union are treated as a member of the cooperative and they are given the right to elect their director for the institutions. On the other hand this is not applicable in case of banks; they are not the member they are just treated as customer who benefits the institutions. And instead banks are owned by share holders.

•    In terms of classifications: Banks offers different kinds of savings , commercial options , where as credit union have only two sets corporate credit unions and consumer credit unions.

•    In terms of reliability: Both banks and credit unions are safe when it comes to deposits. The Federal Deposit Insurance Corporation ensures the deposits made in banks are secured. They provide insurance for the deposits held in the banks. In case of credit unions the National Credit Union Share Insurance Fund ensures the deposits made in credit unions are safe and secured.

•    In terms of popularity: Banks and credit unions both of them are globally present all over the world .They are easily accessible. But when it comes to popularity banks are more popular with is its wide connections and thousands of branches with easy usability. On the other hand in case of credit unions it is less popular as compare to banks because of its limited connections worldwide.

These are some of the variations between the banks and the credit unions, which you can consider when planning to invest your money with the financial institutions. Both the institutions are abide by the government norms and regulations and there is a total transparency in their operations. For more information, you can contact your local Pensacola Credit Union.