Credit union vs Bank

Whenever we are talking about the banking insdustry we use some terms that we are not sure how to use, since everyone is not aware of the basic vocabulary used to talk about tha topic. For instance, everytime we say the word 'bank' maybe we are not making reference to a bank but to another institution, like a credit union. To establish some basic notions of finance vocabulary we are going to point out several differences between credit union vs bank.


We can define a bank as a financial institution or corporation which receives, lends, exchanges and protects the money. The definition of a credit union would be a financial institution or corporation which operates in many ways but that has been designed to serve a particular group. The first difference is that in credit unions you can join the group if you put some money there; you will be a member and you will make decisions together with the rest of the team. In the banks you can put your money but that does not make you a member, and the benefits are not going to revert on you but to the bankers.So, the main ideas of the credit union are that the money coming into will return to the same people, with the corresponding benefits, and that if your money is in the institution you have the right to decide what is going to happen with it.


There are other differences that can be inferred from the ideas we have just pointed out, like the fact that credit unions are democratically controlled by members, whereas banks would not be called a democratic system. In spite of that, we know that credit unions may sound better than banks but there are also some disadvantages regarding them. The main is that banks offer a wide variety of services that are not available in all credit unions, and also that banks are usually more accesible to people in general. That fact can represent an important advantage to those who travel frequently.


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