What's the Difference Between a Credit Union and a Bank Checking Account?

Both offer similar checking features, but fees, membership and account benefits can differ.

 

Checking accounts at credit unions and banks can provide many of the same everyday functions, including deposits, withdrawals, debit card purchases, direct deposit, bill pay and online or mobile banking. The biggest differences are usually the type of financial institution, eligibility requirements, account terms, fees, rates and available services.

The right checking account is the one that fits how you actually manage your money. Instead of choosing based only on whether the institution is a bank or credit union, compare the features, costs, access and support that matter to you.

How Is a Credit Union Different From a Bank?

A credit union is a member-owned financial cooperative. To open an account, you generally must meet the credit union’s membership eligibility requirements. Banks and credit unions can both offer checking and savings accounts, debit and credit cards, loans, and online and mobile banking services.

Is My Money Protected at a Credit Union?

Eligible deposits at federally insured credit unions are insured by the National Credit Union Administration, while eligible deposits at FDIC-insured banks are insured by the Federal Deposit Insurance Corporation. Standard federal deposit insurance generally covers up to $250,000 per depositor, per insured institution, for each ownership category.

What Should I Compare in a Checking Account?

• Monthly maintenance fees and ways to waive them
• Minimum balance requirements
• Overdraft and non-sufficient funds policies
• ATM access and possible out-of-network fees
• Online and mobile banking features
• Direct deposit and bill-pay options
• Interest or rewards, if offered
• Branch access and member or customer service

Are Credit Union Checking Accounts Always Cheaper?

Not necessarily. Fees, rates and account features vary by institution and account. Compare the actual terms of the accounts you are considering rather than assuming one type of institution will always cost less.

Do I Need to Be a Member to Use a Credit Union?

Yes. Credit unions have membership requirements, sometimes called a field of membership. Eligibility may be based on factors such as where you live, work, worship or attend school, or membership in a qualifying organization. Requirements vary by credit union.

How Do I Choose the Right Checking Account?

Start with your everyday habits. If you use direct deposit, ATMs, mobile deposit or online bill pay frequently, make sure those services fit your needs and understand any associated fees. Also review minimum balances, overdraft policies and how quickly deposited funds become available.