News: Credit Union vs. Bank — Which Is Right for You?

When looking for a place to manage your money, the decision often comes down to two types of financial institutions: banks and credit unions. In this guide, we'll deep-dive into the nuances that differentiate them so you can make an informed decision tailored to your financial needs.

Ownership Structure


For-Profit:  Banks are for-profit organizations aiming to maximize shareholder returns.

Corporate Management:  Run by a board of directors and accountable to shareholders.

Credit Unions

Not-for-Profit:  Credit unions operate on a not-for-profit basis, with profits going back into the credit union in the form of higher deposit dividends, lower loan interest rates, and improving the member experience.

 Member-Owned:  Owned by members with a volunteer Board of Directors who are accountable to the membership.

Services Offered


Broad Range:  Offer various services, including checking accounts, savings accounts, loans, and investment options.

Advanced Technology:  Larger banks often have advanced online platforms, mobile apps, and tech features like virtual assistants.

Credit Unions

Broad Range:  Like banks, credit unions off various services, including checking accounts, savings accounts, loans, and investment options.

Personalized Service:  Most credit unions, like Texas Bay, also offer advanced technology with online/mobile banking, digital applications, and more. However, they’re known for community focus and more personalized member service.

Interest Rates


Lower Interest Rates on Savings:  Banks offer lower interest rates for deposit accounts.

Higher Interest Rates on Loans:  Banks being for profit, have higher interest rates on their loan products.

Credit Unions

Competitive Interest Rates: Often provide higher dividend (interest) rates on savings accounts and lower interest rates on loans.

Accessibility and Convenience

Online and mobile banking have become the great equalizer between these two types of financial institutions. Physical locations remain in the large bank domain, but credit unions have found a way to compete and provide members service nationwide through shared networks.


Large Branch Network:  Generally, more branches nationwide.

Extended Hours:  May offer extended operating hours and more branded ATMs.

Credit Unions

Local Presence:  Primarily serve local or specific communities, though some serving federal and military employees are often nationwide.

Shared Branching:  Many, like Texas Bay, participate in a shared branching network, allowing you to perform basic transactions at over 5,300 credit union locations around the United States, the largest bank only has 4,900 branches. Additionally, Texas Bay participates in the AllPoint ATM Network, offering over 55,000 surcharge-free ATMs nationwide.

Regulatory Oversight


Federal Oversight:  Regulated by federal agencies like the Federal Reserve and Federal Deposit Insurance Corporation (FDIC).

FDIC Insured:  Deposits insured up to $250,000.

Credit Unions

State and Federal Oversight: Regulated at either the state or federal level, depending on the credit union’s charter. Texas Bay is a state-regulated credit union.

NCUA Insured: Like the FDIC for banks, the National Credit Union Administration (NCUA) insures deposits up to $250,000. Some credit unions, like Texas Bay, also offer additional private insurance up to $250,000 at no cost to members. That means, Texas Bay offers up to $500,000 coverage.


Community Involvement


Limited Local Involvement: Larger banks might be less involved in local community events.

Credit Unions

Highly Involved: Often sponsor local events and offer financial education as they are community-centric.

Security Measures

Both types of institutions offer robust security measures for accounts, including:

  • Multi-factor authentication
  • Encryption
  • Fraud monitoring
  • 24/7 card control

Open an Account with Texas Bay Credit Union Today!

The choice between a bank and a credit union comes from your priorities. A credit union like Texas Bay is the perfect fit if you want all the bank can offer but also value community engagement, higher dividends on deposits, lower interest rates on loans, lower fees, and personalized service.

Either way, remember that this decision plays a significant role in your financial journey. Take the time to weigh the pros and cons and choose wisely!