While both credit unions and banks offer similar financial products, structurally they are completely different. That difference translates into a wealth of benefits for credit union members.
Governance-Credit unions are locally owned by the members who do business with them, not stockholders. Credit union members elect the board of directors from among the membership. These unpaid volunteers look out for members’ best interests, and not just maximizing the bottom line.
Purpose-Not-for-profit credit unions exist solely to meet the financial needs of their member owners. Because they have no stockholders expecting dividends, credit unions invest earnings by offering more competitive rates of return on accounts, lower interest rates on loans, lower fees and improved services. A credit union’s primary concern is its members’ financial success.
Member Benefits-Competitive pricing and lower fees help people stretch their money farther and obtain affordable services. Credit union members nationwide save $6.3 billion a year by using a credit union instead of a bank. This works out to be about $150 per household in savings for credit union members.
Credit unions provide financial counseling and educational seminars that many for-profit institutions avoid, as they see them as a drain on resources that are better put toward making a profit.
Values-Credit unions have always placed the importance of people over profit. This translates to significant charitable activities within the communities they serve, whether it’s through volunteerism, community support, sponsorships, or financial education.
HVFCU serves people and businesses located in the Hudson Valley; specifically, you must live, work, worship, attend school, or volunteer in Dutchess, Ulster, Orange or Putnam County. Become a member today by clicking “Establish your HVFCU Membership” on our online account opening page.
Key Differences Between Credit Unions & Banks
|Not-for-profit organizations||Profit-oriented organizations|
|Return profits to members in the form of lower loan rates, higher savings rates, and free or low-cost services||Return profits to a small group of stockholders|
|Invest directly back to members||Invest in corporate bonds or stock market|
|Serve those individuals within their field of membership||Serve anyone in the general public|
|Have members who act as co-owners and “own” a stake in the organization||Controlled by stockholders and paid officials|
|Are member-service driven||Are profit-driven|
|Are federally insured by the National Credit Union Administration (NCUA)||Are federally insured by the Federal Deposit Insurance Corporation (FDIC)|
|Elect a volunteer Board of Directors to represent their interests||Have a paid Board of Directors who represent the owners; customers do not have voting privileges|