What is a Credit Union?

Yes, banks and credit unions do have similarities: checking and savings accounts, loans, tellers, debit cards, etc . . . but the differences are significant and worth examining.

As a member/owner you'll share in SouthPoint Federal's success. The more business we do with our members, the better off you'll be with even lower loan rates and even greater dividends. And you'll be glad to know your money stays local, right here in the community for others to share. As a member/owner you share in the Credit Union's profits through higher savings rates, lower loan rates, and low or no fee services. Bank profits go to their stockholders.

Credit Unions voluntarily reinvest in and serve their communities. Banks are required to reinvest in their communities by law. Read more on our Community page.

 

CREDIT UNION

 

BANK
 

Not-for-profit financial institution

   Publicly traded and privately owned
 

Owned by the people who belong to the credit union

   Stockholder
  Primary focus is its members/co-owners
more concerned about making you happy than turning a profit		  

Generate profit for stockholders. Make decisions based on what will give stockholders more profit.
 

Typically offer more educational services and seminars to teach you about all financial products so you can make the best decision.

   May be more inclined to recommend only those products that bring in higher corporate profits.
  Not-for-profit organization exempt from most state and federal taxes.  

As a for-profit business, banks must pay taxes to the government. Serve customers from the general public. Anyone can use a bank.
  Income is returned to members in the forms of better savings rates, lower loan rates, and low or no fees for services.  

Income is returned to the stockholders in the form of higher dividends on their shares of stock.
  $250,000 of your cash is insured and regulated by the National Credit Union Association.  

$250,000 of your cash is insured and regulated by the Federal Reserve Bank's coverage.
 

Exist solely to serve their members. A person must be within the credit union's field of membership, as defined by their charter, in order to join. There are many CUs with community charters. Anyone in the U.S. can join a credit union.

   Serve customers from the general public. Anyone can use a bank.
 

Unpaid volunteers from the membership serve on the Board of Directors and guide the credit union.

   The Board of Directors are paid a salary.
  As owners, members elect fellow members to serve on the Board of Directors.  

Only people who own stock can vote for the Board of Directors. The customers who use the bank don't have a say.