What Is a Credit Union?

A credit union is a "not-for-profit" financial institution that offers many of the same services of a traditional bank, but is owned by the people who use it (members) rather than stockholders in some far-away city.

The concept of credit unions arose in the mid-1800s as a grassroots alternative to what many felt were unfair and expensive policies at commercial banks.

Today credit unions exist to provide you with a safe place to save and borrow at more favorable rates than offered by most commercial banks. Unlike a bank, a credit union's profit is returned to its members in the form of lower loan rates, higher savings rates and additional services.

To ensure the safety of your accounts, a credit union's records and business activities are also examined by the National Credit Union Administration, (NCUA), an agency of the United States Government. NCUA examines the operation of the Credit Union and insures the safety of your savings up to $250,000.