What Is a Credit Union?

We hear this question a lot, along with: "Is a credit union a bank?" (No, it is not) and "What's the difference between a credit union and a bank?"

Great questions-and some of the answers may surprise you. The truth is, both credit unions and banks follow federal financial regulations and provide many of the same services. And both have an obligation to put the interests of their owners first. But the ownership structures of banks and credit unions are fundamentally different. And that distinction can profoundly impact your banking experience. Here's how:

Credit Unions vs. Banks

Credit unions have members. Banks have shareholders.

Credit unions are built on a not-for-profit, cooperative structure. They're made up of members who each OWN an equal stake in the institution. Banks are for-profit enterprises that must answer to outside shareholders.


Credit union earnings go to members. Bank earnings go to shareholders.

Thanks to their not-for-profit status, credit unions can return earnings to members through competitive deposit and loan rates, lower or no fees and free services like billpay, ATMs and financial education resources. Banks have an obligation to pay out profits to outside shareholders in the form of dividends.


Credit unions are democratic. Banks are not.

Because credit unions operate on a “one member, one vote” philosophy, everyone has an equal voice and vote in board elections and other big decisions. Banks are governed by paid shareholders, and voting rights depend on the number of shares owned.

Credit unions are community based. Most banks are not.

Credit unions are local, community-based financial institutions. Members support their local communities when they bank at a credit union. Most banks are much larger—on average about double the size of credit unions—and managed by corporate entities far removed from their service areas.


Credit unions are insured by NCUA. Banks are insured by FDIC.

When it comes to strong government regulation and government insured deposits, there is virtually no difference between banks and credit unions. Deposits at federally chartered credit unions like TopLine are insured up to at least $250,000 by the National Credit Union Administration (NCUA) —which, like the FDIC, offers the full guarantee of the U.S. government.

Credit Union membership benefits

All the ways credit unions are different from banks can add up to huge benefits for you as a member. Because we don’t report to outside shareholders, TopLine Federal Credit Union can afford to:

  • Put people ahead of profits—delivering the highly personalized services you deserve
  • Avoid financial risks—ensuring you always have a safe, sound banking institution you can trust
  • Bring earnings and savings back to you—reducing fees and providing competitive loan and deposit rates
  • Offer greater community support to local businesses, charities, causes and events