What’s the difference between a bank and a credit union? You’re not alone if you think it’s just the name on a building. However, banks and credit unions are different in a lot of ways.

 Q: How are they structured?

 A: Banks and credit unions have completely different business models. Banks are structured to make a profit for shareholders. Credit unions are not-for-profit. They are structured to provide affordable financial services for members.

 Let’s get more specific.

 A bank’s board members are shareholders paid by the bank’s income. They might own the bank’s stock or might be family owners in the case of smaller banks.

 Members are a credit union’s shareholders. Each member owns one share. Credit union board members are unpaid member-volunteers who hire the CEO and set organizational strategy. The decisions they make are in members’ best financial interest.

 Q: Who do they serve?

 A. Banks serve “customers” and credit unions serve “members.”

 Banks can serve anyone who walks through their doors. Credit unions cannot. Laws created by the federal government require credit union members to share a common bond. At most credit unions, members live, work, attend school or worship within specific geographic boundaries.

 For example, Allied members must live, work, worship or attend school in Arlington, Mansfield, Pantego or Dalworthington Gardens, but can also be family to a current member, or potential member.

 At some credit unions, members must work for a specific company or work in a certain field like education, military or city government.

 Q: Which has the most benefits?

 A: We’re definitely biased when we say this, but credit unions give you more benefits than banks. Banks used to have a technology edge, but that’s quickly changing.

 Credit union benefits include:

 ·       Better loan rates

·       Any profits are returned to members in different ways

·       Willing to serve people banks identify as a financial risk

 Now that you know the differences, we hope you’ll join Allied FCU if you aren’t already a member.

 Become a member today!