Money Saving Monday: What’s the real difference between banks and credit unions?

Understanding the difference between banks and credit unions can lead to significant savings for consumers.

“Often times people get confused between credit unions and banks and it’s totally understandable,” said Kristen Piscopo, Community Impact Manager at STCU.

Banks operate for profit, generating revenue for shareholders. Credit unions are member-owned organizations where profits return directly to members and their communities.

Credit unions typically offer more competitive rates on loans and savings accounts because they don’t generate profits for shareholders. However, they require membership qualifications, often including living in specific areas or working for certain employers.

The choice comes down to priorities. Banks offer convenience and extensive networks, while credit unions focus on better rates and community investment.

This decision matters most for major financial products like mortgages and auto loans, where small rate differences create substantial long-term savings.