Table of Contents
What is Credit Union?
A credit union is a financial cooperative that is owned and controlled by its members. Credit unions provide members with a wide variety of financial services, including savings and checking accounts, loans, and credit cards.
A credit union is a member-owned, not-for-profit financial cooperative that provides financial services to its members, such as credit cards, insurance, and investment products. Credit unions are typically governed by a board of directors elected by the membership.
Credit unions are typically much smaller than banks and offer higher interest rates on savings accounts and lower interest rates on loans Credit unions provide a safe place to save and borrow money at reasonable rates.
Credit unions are also typically smaller than banks and offer a more personal level of service.
What is Bank?
A bank is a financial institution that accepts deposits from individuals, businesses, and other organizations and then uses those deposits to make loans. The loans can be for a variety of purposes, including buying a home, starting a business, or paying for education. Banks earn money by charging interest on the loans they make.
Banks may also provide financial services such as wealth management, currency exchange, and safe deposit boxes. The money that is lent out is typically in the form of loans. Banks earn money by charging interest on the loans that they make.
The economy is the system of production, distribution, and consumption of goods and services in a society. Banks play an important role in the financial system and the economy.
Banks help to promote economic growth and they help to create jobs. They also help to stabilize the economy by providing a source of lending during periods of economic downturn.
The banking system is important to the economy because it provides the money that businesses need to invest and grow. When the banking system is working well, it provides a steady flow of money that helps the economy to grow.
The functions performed by banks include accepting deposits and making loans, acting as a financial intermediary, providing a safe place for people to store their money, facilitating the transfer of funds, investing in and managing assets, providing other financial services.
Difference Between Credit Union and Bank
- The main difference between credit union and bank is that credit union is a non-profit financial institution while bank is a for-profit financial institution. A credit union is a cooperative financial institution that is owned and controlled by its members.
- Credit unions provide their members with a wide range of financial services, such as savings accounts, loans, and credit cards.
- Credit unions are not-for-profit organizations, and they are run by a board of directors that is elected by the members.
- A bank is a for-profit financial institution that provides its customers with a wide range of financial services, such as savings accounts, loans, and credit cards.
- Banks are owned by shareholders, and they are run by a board of directors that is appointed by the shareholders.
Comparison Table Between Credit Union and Bank
|Parameters of Comparison||Credit Union||Bank|
|Organization||Not for-profit cooperative||For-profit corporation|
|Ownership||Member owned||Shareholder owned|
|Service||Provides a personal service||Do not provide a personal service|
|Fees||May not charge a monthly maintenance fee||Charges a monthly maintenance fee regardless of the account balance|
|Interest rates||Higher savings rates and lower loan rates||Lower savings rates and higher loan rates|