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What’s the Difference Between a Bank and a Credit Union?

Credit:  CNET

When comparing banks and credit unions, look out for fees, minimum balance requirements and rates on savings products.

Both banks and credit unions offer a variety of financial products and services. They are equally safe for your cash thanks to the Federal Deposits Insurance Corporation (FDIC) and the National Credit Union Administration (NCUA), but differences crop up when it comes to fees, minimum balance requirements and interest rates.

What is a bank?

Banks are for-profit institutions and can be privately or publicly owned. They offer checking accounts, savings accounts, money market accountspersonal loans and certificates of deposit (CDs), while providing convenience and safety services such as check cashing, bill payment, transferring money and accessing cash. The FDIC insures member bank accounts up to $250,000 per account.

What is a credit union?

A credit union is a not-for-profit organization, as it’s owned by its members. It provides similar financial services to banks, including savings accounts and loans. Credit unions are open only to people with a common bond, such as those living in the same area or affiliated with the same organization. They’re also typically exempt from federal taxes, and some receive subsidies from affiliated organizations. Deposits in credit union accounts are insured by the National Credit Union Administration up to $250,000 per depositor.

You are eligible to become a member at Fitzsimons Credit Union if you:

  • Live, work, worship or attend school in Adams, Arapahoe, and Denver Counties.
  • Are a family member of someone who lives, works, worships, or attends school in Adams, Arapahoe, and Denver Counties.

Bank vs. credit union

The choice between a bank and credit union is not one-size-fits-all. You’ll have to weigh the pros and cons with your goals to determine your best fit.

Advantages of banks

  • More locations/ATMs: Big banks tend to be located across the country, and you may have locations to visit if you’re traveling. Brick-and-mortar banks are more readily available, and you may have multiple branches in your town alone.
  • More financial products and services: Banks offer an array of financial services and products, while credit unions generally stick with deposit accounts, credit cards and loans.
  • Better online/mobile banking access: Banks tend to have more well-established mobile banking options than credit unions. If you prefer online banking, banks generally offer more advanced websites and mobile apps that make banking at your fingertips seamless.

Disadvantages of banks

  • Lower savings rates: More traditional banks don’t offer as competitive APYs on their savings products as credit unions.
  • Fees: Banks may charge fees for services such as ATM usage, overdrafts, monthly fees for checking accounts or overdraft fees for bounced checks.
  • High balance requirements: Banks may require you to maintain a minimum balance — usually anywhere from $100 to $1,000 — in your checking account. Otherwise, you may have to pay a monthly fee.

Advantages of credit unions

  • Better interest rates: Whether you’re seeking savings accounts or loans, credit unions typically offer better rates because they are not-for-profit organizations.
  • Local connection: Credit unions tend to emphasize customer service, but their emphasis on community means that their branches may be smaller.
  • Fewer fees: Credit unions carry fewer monthly costs than banks, so they are more likely to forgo monthly maintenance fees or minimum balance requirements.

We offer a wide range of financial products from savings and checking to auto, home and personal loans.  We’re here to help our members achieve their financial goals.  

Disadvantages of credit unions

  • Limited access: Credit unions are typically local or regional, with fewer branches compared with commercial banks.
  • Membership requirements: Credit unions may require you to be a member to open an account. Some charge a membership fee and may require a minimum deposit. The amount varies by the credit union. You may only be eligible to join if you have a certain type of job or live in a particular area.
  • Fewer products and services: Credit unions typically have fewer products than banks, and many don’t offer services like brokerage and wealth management.
  • Limited accessibility: Credit unions may be less technologically advanced than online banks and traditional banks. They may not have well-established mobile banking options.

We are here to serve the Adams, Arapahoe, and Denver county communities with our 2 branch locations, a digital branch and online/mobile banking.  Plus as part of the CO-OP network our members have access to over 30,000 CO-OP ATMs and 5,600+ Share Branch locations.  


The best banks and credit unions provide safe, accessible ways to manage and grow your money. However, each institution has its pros and cons, such as fees and membership requirements, which should be considered before making a decision. Research to compare fees, interest rates, and services offered by banks and credit unions to decide which institution is best for you.