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Credit union vs. bank: Which is better?

Both offer banking products, but which one should you choose?

Should you open an account with a bank or a credit union? To decide, you’ll need to know the difference between a credit union vs. bank. They both offer checking and savings accounts with insured deposits up to $250,000. But credit unions are known for superior customer service, while banks are quick to adopt new technology.

What’s the difference between a credit union vs. bank?

Both credit unions and banks offer a suite of financial accounts. But there are a few key differences between the two.

Credit unionsTraditional banks
More banking products
More branch locations
More ATMs
Better customer service
Lower monthly fees
Higher APYs
Better technology
Insured deposits up to $250,000

Pros and cons of credit unions

Credit unions insure deposits up to $250,000 through the National Credit Union Administration and offer unique pros and cons such as:


  • Non-profit. Credit unions are customer-owned, so they’re known to have better customer service than traditional banks.
  • Local branches. Credit unions typically have several local branches in the communities it serves.
  • Lower monthly maintenance fees. Through its membership-only structure, credit unions are able to offer lower monthly fees to its customers.
  • Higher interest rates. Credit unions typically have higher interest rates on savings and checking accounts than traditional banks.


  • Limited locations. Locations are typically limited to one area or region, making it hard to bank in-person if you move or travel.
  • Restricted eligibility. Often times you must be affiliated with a certain group or community to join a credit union membership.
  • Membership fees. You’ll pay a membership fee to open an account with a credit union.
  • Older technology. Credit unions are slow to adopt new banking technology compared to traditional banks.

Pros and cons of banks

Banks offer FDIC-insured deposits up to $250,000 and have unique perks and drawbacks, such as:


  • More products. Banks have a broader product offering than credit unions, which typically includes checking and savings accounts, business accounts, credit cards and more.
  • More locations. Banks have a national presence, making it convenient to bank in-person wherever you are.
  • More ATMs. Customers at most traditional banks can find ATMs nationwide.
  • Up-to-date technology. Banks usually roll-out new technology quickly, while credit unions lag behind.


  • For-profit. Banks are known for having less superior customer service than credit unions due to its for-profit structure.
  • Higher monthly fees. Banks don’t have membership fees, so it typically makes up for this cost through higher monthly fees.
  • Lower interest rates. Traditional banks offer lower APYs on checking and savings accounts than credit unions.

Credit union vs. bank: Which is better for me?

It all depends on what you’re looking for in a financial institution. If you want highly personalized service and solid interest rates, then a credit union may be best for you. But if you’re looking for a modernized bank account with a large ATM network, then a traditional bank may be the way to go.

Credit union vs. bank: Which is safer?

Your money is just as safe and secure in a bank as it is at a credit union. Both federally insure deposits up to $250,000 and deploy safeguards to protect your data and privacy. The only difference is banks insure funds through the FDIC, while credit unions use the NCUA.

5 ways to compare credit unions vs. banks

Keep the following in mind when you compare credit unions vs. banks:

1. Fees

Credit unions typically have lower monthly fees than traditional banks, but there’s often a one-time membership fee you’ll have to pay. Compare monthly fees and membership fees when deciding which institution may be right for you.

2. Eligibility requirements

Anyone can open an account at a bank as long as you’re 18 years or older and a US resident.

Credit unions typically have stricter eligibility guidelines, which require you to be part of a certain group or community. However, some credit unions let anyone join as long as you make a small donation to a particular organization.

3. Locations and ATMs

Banks have branch locations and ATMs nationwide, while credit unions are typically centralized in one region or community. However, some credit unions fill in this gap through the CO-OP Shared Branches network, which offers branch locations and ATMs in all 50 states.

When comparing branch and ATM locations at banks and credit unions, see if the credit union is a part of a larger network.

4. Interest rates

Credit unions generally have better loan interest rates and higher interest rates on deposits than traditional brick-and-mortar banks. That means you’ll save more when borrowing money and make more when saving.

But since interest rates vary greatly by region and provider, you’ll want to shop around to find the best deal. And be sure to compare online banks as well, since they tend to offer higher-than-average interest rates.

5. Technology

Banks — especially online banks — are quick to roll out new tech and apps. Their mobile and online banking services are likely more advanced and include more features than credit union tech offerings.

Compare bank accounts from credit unions and banks

Use the table to compare bank accounts from popular financial institutions by minimum deposit, ATMs and more. View your top picks side-by-side by checking the “Compare” box next to each one.

Name Product APY Minimum deposit to open ATMs Out-of-network ATM fee
Aspiration Spend & Save Account
Finder Rating: 3.8 / 5: ★★★★★
Aspiration Spend & Save Account
Up to 1.00%
55,000 free in-network ATMs
Deposits are fossil fuel-free and insured by the FDIC. Enjoy a spend and save combo account with unlimited cash back rewards and a $100 bonus when you spend $1,000 in your first 60 days.
Chase Total Checking®
Finder Rating: 3 / 5: ★★★★★
Chase Total Checking®
Access to 16,000 ATMs and more than 4,700 branches nationwide
Chase Total Checking is easy to use and gives you access to 16,000 ATMs and more than 4,700 branches. It offers a $225 signup bonus to new Chase customers
HSBC Premier Checking
Finder Rating: 2.7 / 5: ★★★★★
HSBC Premier Checking
Free to use at all ATMs in the US
Get a 3% cash bonus in the first six months (up to $600) or $450 welcome bonus when you open your account with qualifying activities. Must open HSBC Premier checking account through offer page by August 31, 2021, and set up qualifying direct deposits into the new account. Conditions apply. Deposit products are offered in the US by HSBC Bank USA, N.A. Member FDIC.
Axos Bank Essential Checking
Finder Rating: 5 / 5: ★★★★★
Axos Bank Essential Checking
ATM fees reimbursed at any ATM nationwide
No fees. Unlimited domestic ATM fee reimbursements.
Axos Bank Rewards Checking
Finder Rating: 5 / 5: ★★★★★
Axos Bank Rewards Checking
ATM fees reimbursed at any ATM nationwide
Earn up to 1.25% APY while enjoying a suite of digital tools for smarter money management.

Compare up to 4 providers

Bottom line

Credit unions are known for its local ties to the community and quality customer service, while banks offer more products and stay up-to-date on technology. Whichever you prefer, shop around for the best credit union savings accounts or check out our A to Z list of banks before you decide.

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