What is the difference between a bank and a credit union?

The main difference between a bank and a credit union is their ownership structure. A bank is a commercial enterprise owned by shareholders and run by a board of directors. Banks usually make a profit on the services they provide. Credit unions, on the other hand, are non-profit, member-owned organizations. All members of a credit union have a part ownership in the organization, and all decisions are made by a democratically elected board of directors. Another key difference is the focus of their services. Banks typically focus on providing services to businesses and wealthier individuals, while credit unions focus on providing services to anyone in the community, regardless of their income and social status. This can lead to different fees and interest rates for borrowers. For example, credit unions are often able to offer lower interest rates on loans because they do not have to make a profit. Finally, banks and credit unions differ in the type of services they offer. Banks offer a wide range of services, including investments and wealth management, while credit unions tend to focus on providing basic financial services such as loans, checking and savings accounts. Credit unions are also more likely to offer unique services such as credit-builder loans, which help individuals build credit. In conclusion, banks and credit unions have different ownership structures, service focuses and product offerings, which makes them two very different kinds of financial institutions. Virginians looking for financial services should carefully research both banks and credit unions to find the best option for their needs.

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