A credit union is a financial institution that accepts deposits, makes loans, and provides a wide array of financial products and services. Deposits are insured by the National Credit Union Share Insurance Fund, which is managed by The National Credit Union Administration (NCUA). This fund insures the accounts of millions of account holders in all federal credit unions and the vast majority of state-chartered credit unions.

Yet credit unions are very different from banks! Although they offer many of the same products and services as other financial institutions, credit unions have some distinguishing characteristics that make them unique:

1.) Member-Owned – Credit unions are owned and controlled by the people, or members, who use their services. A volunteer board of directors is elected by members to manage a credit union. So your vote counts!

2.) Not-for-Profit – Credit unions operate to promote the well-being of their members. Profits made by credit unions are returned back to members in the form of reduced fees, higher savings rates, and lower loan rates.

3.) Membership – Members of a credit union share a common bond, also known as the credit union’s “field of membership.” You may be able to join based on your employer, family, geographic location, or membership in a group.

4.) Community Involvement – Credit unions have a rich history of helping the communities they serve through education, supporting small businesses, and charity involvement.

5.) Cooperative Nature – The structure of credit unions creates a cycle of mutual assistance for all members. One member’s savings become another member’s loan.

Shared via the courtesy of MyCreditUnion.gov