Credit Union

Credit Unions are financial institutions set up and owned by its members, which share profits between them. The idea is to promote reasonable credit rates and other financial services between the members that are better than other market alternatives. When somebody deposits money in to an account of a credit union, they then theoretically become a part owner and a participant in the union's financial success, almost like a share.

Credit unions are often created by large corporations and organizations to benefit their wide range of workers and employees, making everybody across the board financially prosperous; thus the corporation and organization itself becomes better off. It's almost like creating a separate community for the employees. Other credit unions aim to further the development and economic growth of the local community.

There is a huge variation of size between credit unions. Some are simply volunteer organizations looking to do well by the community, whereas others can be huge institutions with billions in the system. Despite this they are generally smaller than recognized banks.

The main difference between Credit unions and Banks are, as alluded to above, that people who hold accounts and have money in the Union are considered part owners, whereas banks run independently of their account holders. Credit Unions also fairly elect their board of directors with each account holder having an equal say. Because of this it can be argued that everybody works together in a credit union to get the best interest rates etc, although it doesn't always work out that way.

Credit unions offer most of the same features and services as banks (albeit under different guises). These may include credit cards, online banking share accounts (aka savings accounts), share drafts (aka checking accounts), share term certificates (aka certificates of deposit) and various other financial services.