How does a credit union typically differ from a bank?

A credit union is primarily distinguished from a bank by its non-profit status and its focus on serving its members. Unlike banks, which aim to generate profit for shareholders, credit unions are member-owned cooperatives that operate to benefit their members. This structure often allows credit unions to offer more favorable interest rates on loans and higher interest rates on savings accounts, as well as lower fees compared to traditional banks. The community-oriented approach of credit unions helps foster a collaborative environment where members can access financial services tailored to their needs.

This non-profit aspect not only influences pricing but also emphasizes member service, making credit unions inherently different in their mission and operational strategy compared to traditional for-profit banks.