A credit union is a financial institution that is similar to a bank, but there are some important differences between the two. Credit unions are non-profit organizations. The members of a credit union are the people who use its financial services, similar to a bank's customers. Depositing money in a credit union gives a person partial ownership in it. Because members own and ultimately control the organization, credit unions tend to cater to the best interests of the individuals who make them up.

There are a wide variety of services that are usually offered by credit unions. Most people can have all of their everyday banking needs met by joining one. They provide options for savings accounts, checking accounts, and debit cards. Many of them have interest-bearing checking accounts. Credit unions are also lenders. They offer mortgages and other types of personal and business loans to their members, including credit cards. Another typical service is investment assistance. Members can go to a credit union for help with investing in a mutual fund or CD, for example.

People choose to use credit unions instead of banks for many reasons. One benefit is that they usually give higher interest rates on deposits and investments and charge lower interest rates on loans. They also tend to be more reasonable about charging service and overdraft fees. People like the idea of having partial ownership in the financial institution they are dealing with. This means that profits flow back to the members instead of being used by a bank to pay for extensive marketing campaigns, inflated salaries, and other extravagant or unnecessary business expenses. Having the status of being a non-profit organization also helps to lower overhead costs, because they are exempt from paying state and federal taxes. Credit unions pay dividends to members based on their profits.

Credit unions do not allow anyone who wants to join to become a member. They typically have guidelines for membership that require an individual to have an affiliation with a certain group. For example, some large companies set up credit unions for their employees and customers. Some of them have membership that is based on living or working in a certain town or region. There are many different types of criteria that credit unions use to determine who is allowed to join, including being part of a particular organization, school, alumni group, or religion. It sometimes requires a little research to find a credit union that an individual is able to become a member of. Many people find that the advantages are well worth this effort.

The National Credit Union Administration oversees and regulates the way in which most credit unions are run. They are kept in check like any other type of financial institution. This is done to try to prevent mismanagement, fraud, and other illegal practices. Deposit insurance is offered at many credit unions up to $100,000. It's a good idea to investigate the protections in place for an individual credit union before joining.