What Is Credit Union?
Definition
A nonprofit financial institution owned by its members. Similar to a bank but often offers lower fees and better interest rates.
Example: "My credit union offers free checking with no minimum balance, unlike the big bank down the street."
Why It Matters
Credit unions exist to serve their members, not to maximize profits for shareholders. This often translates to lower loan rates, higher savings rates, fewer fees, and more personalized service. To join a credit union, you typically need to meet a membership requirement, such as living in a certain area, working for a specific employer, or belonging to a particular group. Credit unions are insured by the NCUA (similar to FDIC for banks) up to $250,000, so your deposits are equally protected.
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