Credit unions are non-profit institutions, and as a depositor, you are a part owner. Like a commercial bank, credit unions offer checking and savings accounts and certificates of deposit. They also offer auto and personal loans, and they issue credit cards and mortgages. Instead of the FDIC, your deposits are insured up to $250,000 per account by a similar organization, the National Credit Union Administration (NCUA). The NCUA is also responsible for issuing charters to credit unions.
As mentioned before, credit unions tend to have lower fees and better interest rates on savings accounts and loans since they do not have to generate profits. Most people use their local credit union for car purchases because the rate is normally lower than what is offered by dealers and commercial banks. Credit unions are also an excellent place to apply for a mortgage. Despite all of this, it is worth noting that commercial banks’ mobile apps and online technology tend to be more advanced.
According to the NCUA, as of 2019, there were 5,335 federally insured credit unions with 117.3 million members. At the same time, there were 5,177 commercial banks and savings institutions. So, the number credit unions and the number of commercial banks in the U.S. are approximately equal. Almost half of all U.S. adults are members of a credit union.