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Banks vs. credit unions: How to decide where to keep your money

Your priorities and what you value in a bank will help you determine where to keep your money. Comparing banks with credit unions in your search might make sense.

Banks and credit unions both offer a number of financial products, including savings accounts and certificates of deposit (CDs). The main difference between the two is that banks are typically for-profit institutions while credit unions are not-for-profit and distribute their profits among their members. Credit unions also tend to serve a specific region or community.

There are pros and cons to opening a bank account with either a bank or credit union, but it’s important to know which more closely aligns with your needs. When you find the right bank account, it’ll be easier to save, manage the account and get access to helpful features.

Banks vs. credit unions


Credit unions

Who they serve

Mostly customers in an area where the bank has a branch, unless it’s an online-only bank.

It could be a certain region, employer or common group.

Savings and CD rates

Typically lower than the national average.

Generally above the bank national average.

Do they have branches?

Yes, though some online banks have few or none.

Yes, though some credit unions are online only.


Generally, larger brick-and-mortar banks have advanced technology. Smaller banks might not.

Some larger credit unions have advanced technology, but smaller credit unions might not.


Bankrate insights

  • There were 4,706 federally insured banks in the fourth quarter of 2022, a slight decline from the year before. (FDIC)

  • There were 4,760 federally insured credit unions at the end of 2022.  (NCUA)

  • While the number of credit unions declined from the previous year, the total assets held at all credit unions increased by 5.2 percent in 2022. (NCUA)

  • Americans stick with the same bank account for 17 years on average. (Bankrate)

  • Just over two-thirds (68 percent) of U.S. adults are worried they don’t have enough savings to cover a month of living expenses if they lost their primary source of income. (Bankrate)

  • About half of Americans have either less emergency savings than a year ago (39 percent) or none at all (10 percent). (Bankrate)

Credit unions

Advantages of credit unions

  1. Higher rates: Credit unions are not-for-profit organizations owned by their members. “That’s the main difference between (banks and credit unions),” says Rutger van Faassen, head of marketing strategy at analytics provider Curinos. Credit unions typically provide better savings and lending rates, van Faassen says.

  2. NCUA insurance: Federally insured credit unions are backed by the U.S. government. Your money is safe if a credit union fails. Check the NCUA’s Share Insurance Estimator to see how insurance rules apply to member share accounts, which can help you determine what’s insured and if any amount exceeds the coverage limits.

  3. Personal connection: Credit unions tend to be local or regional and often service a specific community. As such, the service a credit union provides may be more personalized, and you may also be supporting an institution that upholds your values.

Disadvantages of credit unions

  1. Limited access: Credit unions typically are local or regional and may not serve your area. It may not make sense to bank at a credit union that has no branches near you.

  2. Higher rates may be available at online banks: Online-only banks, also known as direct banks, tend to have more competitive savings and CD yields.

  3. Membership requirements: You might have to live or work in a certain region to become a member of a credit union. Or the field of membership, which is the common bond shared by the credit union members, might have other requirements.


Advantages of banks

  1. More locations: Brick-and-mortar banks may have branches and ATMs down the street from where you work or live. And larger ones may also have locations wherever you travel across the country.

  2. Variety of options: Some of the largest banks in the country, such as Chase or Bank of America, are brick-and-mortar banks, but banks can also be small and local or regional and may provide more personalized service. There are also plenty of online banks for the digitally minded.

  3. Advanced technology: Banks are a little ahead when it comes to technology, van Faassen says. They may offer more comprehensive mobile banking apps and special savings features, such as automated saving.

Disadvantages of banks

  1. Lower savings rates: Many of the large, traditional banks in the U.S. do not offer competitive annual percentage yields (APYs) on their savings products.

  2. High balance requirements or maintenance fees: Some banks are known for charging fees, though there are usually ways to waive them.

Brick-and-mortar banks vs. online banks

Depending on their size, brick-and-mortar banks may operate thousands of branches, just one or some number in between. Online banks, on the other hand, usually don’t operate any branches, opting instead to offer their products and services solely over the internet. Similarly to brick-and-mortar banks, some online banks offer accounts to customers anywhere in the U.S., while others only allow consumers in certain states or areas to open accounts.

Without the expense of branches to maintain, online banks are able to attract customers by offering higher yields on savings accounts, money market accounts and CDs, though not all online banks offer competitive rates. Online banks are also known for not charging maintenance fees.

Brick-and-mortar banks sometimes offer signature guarantee services in the form of a notary or medallion signature stamp for transferring securities. Services such as these, along with safe deposit boxes, are why some consumers prefer to have accounts at brick-and-mortar banks.

Bank/credit union trends

  • More reliance on digital banking: Banking technology has been evolving greatly over the years. A survey by BMO found that half of Americans plan to move more transactions online throughout 2023. A significant portion of those surveyed (38 percent) even ranked having access to digital banking as important as having a car.

  • Branches are closing rapidly: Alongside the rise of digital banking is the decline of branch-banking. From 2021 to 2022, 3.2 percent of bank branches closed down, according to a report by the National Community Reinvestment Coalition, a nonprofit. Nearly 20,000 branches have closed since since 2009.

  • The decline of overdraft fees: Various banks and credit unions have either cut or plan to cut or reduce their overdraft fees. Alien Credit Union, Ally Bank and Capital One are just a few of the financial institutions that have been at the forefront of this trend.

  • More households are gaining access to bank or credit union accounts: In 2021, 4.5 percent of households were “unbanked,” meaning they had no bank account, according to the Federal Reserve. While it’s still important to account for that 4.5 percent, the number of unbanked households is the lowest it’s been since the Fed began the survey in 2009.

  • Socially and environmentally conscious banking: Some financial institutions are becoming more conscious of their impact on the world at large, including where they invest their money. The Global Alliance for Banking on Values is a network of banks committed to prioritizing the environment and local communities. Many banks have also shifted from paper statements to paperless statements to reduce the amount of paper waste they produce.

Are banks safer than credit unions?

FDIC banks and NCUA credit unions are both backed by the full faith and credit of the U.S. government and offer similar protections. Both institutions protect up to $250,000 per depositor, per federally insured bank or credit union, per ownership category.

Other factors to consider

Here are some other things to consider when choosing between a bank and a credit union.

  • Are branch and ATM locations convenient?

  • Is the bank or credit union part of an ATM network?

  • Does it reimburse some or all out-of-network ATM fees?

  • Do customer-service hours work with your schedule?

  • Check Bankrate’s reviews to research and compare banks.

Most popular banks and credit unions by state





Regions Bank

Redstone Federal Credit Union


Wells Fargo

Alaska USA Federal Credit Union


Chase Bank

Desert Financial Credit Union


Arvest Bank

Arkansas Federal Credit Union


Chase Bank

SchoolsFirst Federal Credit Union


Wells Fargo

Ent Credit Union


M&T Bank

American Eagle Financial Credit Union


M&T Bank

Del-One Federal Credit Union


Wells Fargo

Suncoast Credit Union


Truist Bank

Delta Community Credit Union


Bank of Hawaii

HawaiiUSA Federal Credit Union


U.S. Bank

Idaho Central Credit Union


Chase Bank

Alliant Credit Union


Chase Bank

Teachers Credit Union


U.S. Bank

GreenState Credit Union


Capitol Federal Savings Bank

CommunityAmerica Credit Union


U.S. Bank

Abound Credit Union


Chase Bank

Barksdale Federal Credit Union


Bangor Savings Bank

Atlantic Federal Credit Union


M&T Bank



Citizens Bank




Lake Michigan Credit Union


Wells Fargo

Wings Financial Credit Union


Regions Bank

Keesler Federal Credit Union


U.S. Bank

First Community Credit Union


Glacier Bank

Whitefish Credit Union


Pinnacle Bank

Cobalt Credit Union


Wells Fargo

Greater Nevada Credit Union

New Hampshire

Citizens Bank

Service Credit Union

New Jersey

Wells Fargo

Affinity Federal Credit Union

New Mexico

Wells Fargo

Nusenda Credit Union

New York

Chase Bank

Bethpage Federal Credit Union

North Carolina

Truist Bank

State Employees Credit Union

North Dakota

Gate City Bank

First Community Credit Union



Wright-Patt Credit Union



Tinker Federal Credit Union


U.S. Bank

OnPoint Community Credit Union


PNC Bank


Rhode Island

Citizens Bank

Navigant Credit Union

South Carolina

First Citizens Bank

Founders Federal Credit Union

South Dakota

First Interstate Bank

Black Hills Federal Credit Union


Regions Bank

Eastman Credit Union


Wells Fargo

Randolph-Brooks Federal Credit Union


Zions Bank

America First Credit Union


M&T Bank

New England Federal Credit Union


Truist Bank

Navy Federal Credit Union


Chase Bank


West Virginia

City National Bank of West Virginia

Bayer Heritage Federal Credit Union


BMO Harris

Landmark Credit Union


Bank of The West

Blue Federal Credit Union

Sources: FDIC and Credit Unions Online

Bottom line

When shopping around for the right bank or credit union, always look out for fees, minimum balance requirements and what rates are offered on savings products. You might also want to consider accessibility — whether that be by branch location or by digital means.

Most consumers keep their bank account with the same institution for over a decade, so it pays to make a decision that you feel confident with. But don’t hesitate to switch to a new bank or credit union, especially when some institutions are offering yields that far outpace others.