{"id":39258,"date":"2023-05-25T08:51:37","date_gmt":"2023-05-25T15:51:37","guid":{"rendered":"https:\/\/financer.com\/?post_type=wiki&p=39258"},"modified":"2024-01-19T08:13:08","modified_gmt":"2024-01-19T16:13:08","slug":"credit-union-vs-bank","status":"publish","type":"wiki","link":"https:\/\/financer.com\/personal-finance\/articles\/credit-union-vs-bank\/","title":{"rendered":"Credit Union vs Bank: What The Difference?"},"content":{"rendered":"\n

Banks and credit unions are two types of financial institutions that offer similar services, yet have many differences. <\/p>\n\n\n\n

A bank is a for-profit organization <\/strong>that is federally insured and offers a wide range of financial services through its branches. <\/p>\n\n\n\n

On the other hand, a credit union is a non-profit, member-owned<\/strong> financial cooperative that offers limited services and operates through a smaller network of branches.<\/p>\n\n\n\n

Banks<\/h2>\n\n\n\n

Banks are financial institutions that offer a range of financial services to their customers and they are federally insured. <\/p>\n\n\n\n

Some of the largest banks in the US include JPMorgan Chase, Bank of America, Citigroup, and Wells Fargo.<\/p>\n\n\n

<\/div>Banks are seen as the financial industry’s backbone and they play a crucial role in the economy.<\/div>\n\n\n

Banks serve millions of customers globally, providing various services such as savings accounts<\/a>, checking accounts<\/a>, loans<\/a>, mortgages<\/a>, and investments<\/a>.<\/p>\n\n\n\n

Types of Banks<\/h3>\n\n\n\n

There are several types of banks, including:<\/p>\n\n\n\n

    \n
  1. Commercial Banks<\/strong>: These banks offer standard banking services, including savings accounts<\/a>, checking accounts, and loans<\/a>. They are the most common type of bank and serve both individuals and businesses.<\/li>\n\n\n\n
  2. Investment Banks<\/strong>: These banks provide a wide range of financial services, including underwriting, trading, and advising on mergers and acquisitions. They typically serve larger corporations and institutional clients.<\/li>\n\n\n\n
  3. Central Banks<\/strong>: These banks are responsible for setting monetary policy and regulating the supply of money in a country. They are usually owned by the government and play a critical role in the stability of the economy.<\/li>\n<\/ol>\n\n\n\n

    Characteristics of Banks<\/h3>\n\n\n\n

    Banks have several key characteristics that set them apart from other financial institutions, including:<\/p>\n\n\n\n

      \n
    1. For-profit institutions<\/strong>: Banks are for-profit institutions that aim to make money for their shareholders.<\/li>\n\n\n\n
    2. Federally insured<\/strong>: Banks are insured by the FDIC, which provides depositors with protection against losses due to bank failures.<\/li>\n\n\n\n
    3. Wide network of branches<\/strong>: Banks typically have a large network of branches, allowing them to serve customers in multiple locations.<\/li>\n\n\n\n
    4. Offer a wide range of financial services<\/strong>: Banks offer a wide range of financial services, including savings and checking accounts<\/a>, loans, mortgages, and investment services.<\/li>\n<\/ol>\n\n\n\n

      The Federal Deposit Insurance Corporation<\/a> (FDIC) insures bank deposits up to $250,000 per depositor and the agency has been around since 1933. <\/p>\n\n\n\n

      This is a guarantee that should the bank go out of business, account holders will be paid out their money up to the limit.<\/p>\n\n\n\n

      Pros and Cons of Banks<\/h3>\n\n\n\n

      Banks offer several benefits to customers, including:<\/p>\n\n\n

      Pros<\/h3>