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Credit union vs. bank: Which is better?

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


Fact checked

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.

How to compare credit unions vs. banks

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

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 Minimum deposit to open ATMs Out-of-network ATM fee
HSBC Premier Checking
Free to use at all ATMs in the US
Get a 3% cash bonus, up to $600 (max. $100 per month) during first six months after account opening. Must open HSBC Premier checking account through offer page by September 30, 2020, 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.
Chase Total Checking
Access to 16,000 ATMs and nearly 4,900 branches nationwide
Get a $200 bonus when you open a new Chase Total Checking account and set up direct deposit within 60 days of opening your account. Chase's simplest checking account is easy to use and gives you access to 16,000 ATMs and nearly 4,900 branches. Available online nationwide except in Alaska, Hawaii and Puerto Rico.
Aspiration Spend & Save Account
55,000 free in-network ATMs
Deposits are fossil fuel-free. A spend and save combo account with unlimited cash back rewards and deposits insured by the FDIC.
TD Beyond Checking
1,900 ATMs across the country and Canada
A checking account that offers interest plus three ways to waive the monthly fee, two overdraft paybacks a year and no ATM fees with a $2,500 balance.
BBVA Online Checking
No ATM fees nationwide at more than 64,000 AllPoint, participating 7-Eleven and BBVA USA ATMs
A full-service account with convenient, surcharge-free access to two massive ATM networks, plus a $200 signup bonus when you meet deposit requirements

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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