Credit Union
A member-owned, not-for-profit financial cooperative offering banking services.
What is Credit Union?
A credit union is a member-owned, not-for-profit financial cooperative that offers banking services — checking and savings accounts, loans, and credit cards — similar to commercial banks, but with a member-service focus rather than profit motive. Members share a common bond (employer, community, or association). Earnings are returned to members as higher deposit rates, lower loan rates, and lower fees. Credit unions are regulated by the NCUA, and deposits are insured by the NCUA's Share Insurance Fund — equivalent to FDIC coverage — up to $250,000.
Example
A teacher joins their state's educators credit union. They receive a checking account with no monthly fee, a savings account yielding 4.5% APY, and qualify for a car loan at 5.9% — rates consistently better than the nearest commercial bank.
Source: NCUA — About Credit Unions