# Banks vs. credit unions?

**URL:** <https://boards.straightdope.com/t/banks-vs-credit-unions/349452>\
**Category:** Factual Questions\
**Created:** [March 22, 2006, 5:14pm UTC](https://boards.straightdope.com/t/banks-vs-credit-unions/349452 "2006-03-22T17:14:21Z")\
**Posts on this page:** 2\
**Page:** 2

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**Author:** ![rsa](https://avatars.discourse-cdn.com/v4/letter/r/839c29/32.png) [@rsa](https://boards.straightdope.com/u/rsa)\
**Post date:** [April 11, 2014, 8:08pm UTC](https://boards.straightdope.com/t/banks-vs-credit-unions/349452/22 "2014-04-11T20:08:57Z")

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> [@Diceman](#):
>
> … I can transfer money online without having to make a trip to the bank, which AFAIK I couldn’t do at my credit union.

Don’t know about the credit union you were using, but I can pay bills, transfer money to and from any internal or external account electronically with ACH transfers at the credit union I am using.

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**Author:** ![appleciders](https://avatars.discourse-cdn.com/v4/letter/a/85f322/32.png) [@appleciders](https://boards.straightdope.com/u/appleciders)\
**Post date:** [April 11, 2014, 8:15pm UTC](https://boards.straightdope.com/t/banks-vs-credit-unions/349452/23 "2014-04-11T20:15:14Z")

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> [@OneCentStamp](#):
>
> Hey gang,
> 
> What is the real difference between a bank and a credit union? I’ve banked at both, and really noticed no difference from where I stand. I put my money in, I get it back out, and if I leave it there for a while, it grows. In fact, I never really thought much about the difference until I saw a billboard near my home that posed the question (in three foot letters): “Why don’t credit unions pay taxes?” Well, why don’t they? And why, as the question implies, must banks pay them? In addition, now that I’ve moved to a different state, I’ve noticed something else: I can walk into pretty much any credit union and deal with them as if they were my own, even depositing money there that is then credited to my own account. For some reason, I can’t envision banks cooperating in this fashion. What gives?
> 
> ~ Ben

First, they’re different primarily in that they have different goals. Banks are for-profit and the goal of a bank is to make money for the owners, who are shareholders who’ve bought stock in the bank. They do this by lending out the money that their customers deposit at interest, and by charging fees to their depositors. A credit union is non-profit, and their goal is to make money for the depositors. They do this by lending out money at interest, and occasionally by charging fees to depositors (though they usually charge fewer fees than for-profit banks) and they give this money back to the depositors in the form of interest. Because they don’t need to pay dividends to their shareholders, they can often pay higher interest rates to their depositors.

Mostly this is a difference of philosophy. Banks are trying to maximize profit. Credit unions are trying to provide banking services to a community. I’ve found that I’m happier at a credit union.

As you’ve seen in this thread, there are a lot of people who are happier with a big national bank because it has branches and ATMs in lots of places. So credit unions band together so that their depositors can get services in lots of places, which makes CUs more competitive.

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