Banks vs. Credit Unions – What’s The Difference?

Sponsored By: How-To Guide, State Credit Union

Brought to you by State Credit Union

If you’re like many people, you’ve heard of credit unions, but you’re not sure who can join them or what makes them different from banks.

Business Model

Simply put, the difference is in our business models. Banks answer to shareholders which means they are profit-driven organizations. Everything they do, every product and service they sell – must generate a profit to keep shareholders happy.

Credit unions answer to their members, who are part owners of their credit union, which means we put our members first. We pass this philosophy to our members in the form of lower fees, lower interest rates on loans and higher interest rates on deposit accounts.


Accidentally bounce a check at a bank and you’ll pay upwards of $36 for the fee. Having the same accidental bounced check at a credit union will only cost $28 to $30. This is just one example – but this holds true across the board.

Customer Service

Credit unions also beat banks in customer service ratings according to the American Customer Service Index. It’s difficult to compete with being treated like a member versus being treated like just another customer. Survey members walking out of their credit union and you’ll hear words like “We love our credit union!” But you don’t typically think of the word “love” when thinking about a bank. There’s an atmosphere of family and genuine concern for your well being when you’re at your credit union.

Accessibility and Services

At one time, banks were known for being more accessible. They had more locations, more ATMs and better online banking and mobile applications. But that’s not the case anymore per Credit unions have really stepped up their game in the last 5 to 7 years and now offer all of this plus online loan applications and many other services that were once a big bank offering only. You now get big bank style products combined with outstanding service at credit unions.

So, for the most part, credit unions are really hard to beat. It’s certainly worth opening a checking or savings account with a credit union, based on their fee structure alone. You’ll pay fewer fees and get more personalized services out of the deal as well.

Keep all this in mind and visit State Credit Union at one of their eight Midlands branches.

State Credit Union is federally insured by the NCUA.