Bank vs. Credit Union Eligibility

Banks are open to the general public. While regional banks operating within a certain location may limit some or all banking products to people in that location, national banks usually extend individual accounts to any legal resident aged 18 or older.3

In contrast, credit unions are required to limit their customer base to a group of people who share a common bond, known as the “field of membership.” Fortunately, the requirement is relatively easy to meet. You may be eligible to join a credit union because of:

  • Where you work
  • Where you live
  • Your membership in an organization (such as a school or place of worship)
  • A family member’s eligibility4

Wherever you are, there’s a good chance you’re eligible for a nearby credit union. Some even serve members remotely or entirely online, allowing you to bank with a credit union in another state.

Operation of Banks vs. Credit Unions

Both types of institutions make money by lending money at higher interest rates than they pay out on deposits, as well as through fees. The key difference between banks and credit unions is that credit unions are not-for-profit organizations owned and controlled by their customers, known as “members.”1 The primary goal of credit unions is to promote the financial welfare of and return profits to their members.

In contrast, banks are for-profit organizations owned and run by shareholders.2 Those investors might be thousands of anonymous stockholders or a few large investors, depending on the bank. The main motive of banks is to maximize profits for these shareholders.