Credit union

A credit union is a co-operative financial institution that is owned and controlled by its members, generally through the election of a Board of Directors. Only a member of a credit union may deposit money with the credit union, or borrow money from it. The character of a borrower is often deemed to be the most important factor in deciding whether or not to make a loan.

Related Topics:
Co-operative - Financial institution - Deposit - Money - Borrow

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A credit union differs from a traditional bank in that the members who have accounts in the credit union are its owners. (Mutual savings banks are owned by members.) Since a credit union is a co-operative institution, its policies governing interest rates and other matters are set to benefit the interests of the membership as a whole; for example, credit unions often pay higher interest on deposits and charge lower interest on loans. Credit union revenues (from loans and investments) do, however, need to exceed operating expenses and dividends (interest paid on deposits) in order to remain in business.

Related Topics:
Bank - Interest rate

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Credit unions offer many of the same financial services as banks, including share accounts (savings accounts), share draft (checking) accounts, credit cards, and share term certificates (certificates of deposit).

Related Topics:
Savings account - Checking - Credit card - Certificates of deposit

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