Credit Unions vs. Banks


Credit Unions


Customers and ownership

  • Credit unions are ethical financial co-operatives owned by their members.
  • Eligibility to become a member is unique to each credit union (its common bond) and is determined within their rules.
  • Each member holds a £1 share in the credit union.
  • Banks have customers rather than members
  • Customers may not be owners in the organisation
  • Banks are owned by investors/shareholders who may or may not be depositors with the bank.

Main purpose

  • Credit unions are not-for-profit organisations, existing primarily to serve the needs of their members and the communities in which they operate.
  • Any surplus funds generated by a credit union are paid back to the members as a dividend
  • Loan rates and investment in new and improvedservices
  • Banks are in business primarily to generate profits for their investors/shareholders


  • Credit Unions are run by members, for members
  • Each credit union has a volunteer Board of Directors.
  • The Directors are all members of the credit union and are elected by the membership to serve them.
  • When it comes to voting, each member of the credit union has one vote, no matter how much they have in savings.
  • Banks are governed by paid directors.
  • Neither bank directors nor shareholders need be customers of the bank or based within the community the bank serves.
  • When it comes to voting, only the investors/shareholders of the bank can vote.  Bank customers have no vote.