In this article, we’ll be answering “What’s the difference between a credit union and a bank?”
Both take deposits, offer loans, have high-interest accounts, and even issue payment cards. So, it can be a bit difficult to distinguish between them.
This is especially true if you are a foreign non-resident who isn’t familiar with credit unions.
That said, if you’re applying for an account as a non-resident and want to know if a foreigner can open a bank account in the US, the answer is yes – you can even click here to start navigating the process right now.
But, foreigners should be looking to open with banks instead of credit unions. We’ll explain why below.
Feel free to use the table of contents to jump ahead to the sections most relevant to you.
Table of Contents
- What’s the Difference Between a Credit Union and a Bank?
- Credit Unions vs Banks
- Should I Open Accounts With Banks or Credit Unions?
- Frequently Asked Questions
- Ready to Open Accounts With Banks in the USA?
What’s the Difference Between a Credit Union and a Bank?
The main difference between a credit union and a bank is that a credit union is owned by its members while a bank is owned by its shareholders. In other words, the members (or the customers) of the credit union actually own the institution. Comparatively, banks are owned through shares in a corporation.
Additionally, credit unions tend to be focused on an exclusive community with unique attributes. This may include veterans, people of a certain heritage, individuals of a certain age, or individuals living in a specific geographic area. On the other hand, banks are able (and are encouraged) to open accounts for individuals from all backgrounds.
In the following section, we’ll take a look at some of the benefits that consumers can access from credit unions and banks.
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Credit Unions vs Banks
Both credit unions and banks offer a range of deposit and credit products to consumers. These often include day-to-day checking accounts, savings accounts, and high-interest savings accounts.
Benefits of Using Credit Unions
Due to their structure, credit unions tend to be more community-focused, offer higher interest on savings accounts, and lower fees for maintaining accounts. Additionally, credit unions are often referenced as providing better customer service at the retail level than banks, though this should be assessed on a case-by-case basis.
Benefits of Using Banks
Banks tend to have significantly larger networks, offer a wider range of services, including a relationship banker, provide more products to choose from, and do not require customers to be from a specific client group or geographic area.
Should I Open Accounts With Banks or Credit Unions?
If you are a foreign non-resident trying to decide if you should open accounts with banks or credit unions, you’re in luck. Foreign non-residents can open accounts at both banks and credit unions, including opening accounts 100% remotely to access online bank accounts with an instant debit card with no deposit.
That said, there are many more banks to choose from and banks tend to be more familiar with onboarding foreigners, especially those that live outside of the United States.
If you are interested in opening accounts with banks and credit unions in the United States, you can get access to our advanced banking reports on the topic right now. To start, you just need to join GlobalBanks USA.
Frequently Asked Questions
Below are three of the most common questions we receive from people looking into the difference between a credit union and a bank. If you have further questions you would like answered, don’t hesitate to get in touch with us directly.
Is a Credit Union Better Than a Bank?
Whether a credit union is better than a bank depends on the individual. Of course, the services they need, and the accounts they can access are also important considerations. For example, credit unions cater to specific client groups. So, anyone outside of that client group should consider opening with a bank instead. Alternatively, someone from a specific geographic area that wants a low-cost mortgage may find credit unions more attractive.
What Is the Downside of a Credit Union?
While credit unions do operate very similarly to banks, they tend to be smaller. As a result, Credit Unions tend to have fewer branch locations, ATMs, and support staff to assist their customers. However, they counter this by providing a more community-centric approach to customer service.
Is a Credit Union Safer Than a Bank?
Customer accounts at both credit unions and banks are protected by deposit insurance in the United States. So, theoretically, in a situation where either a credit union or a bank fails, customer accounts will be protected up to USD 250,000.
Ready to Open Accounts With Banks in the USA?
If so, you can get access to GlobalBanks USA (our dedicated US banking service) in just a few clicks.
GlobalBanks USA is a 100% personal account opening solution. It provides direct access to our team of US banking experts.
When you join, you receive…
+ Expert suggestions on where to open US bank accounts.
+ Step-by-step support to navigate opening US bank accounts.
+ Direct introductions to helpful and responsive bankers.
+ Plus, detailed guides to maximizing the value you get from your new US bank account.
And “yes!” GlobalBanks USA helps foreigners and non-resident individuals open bank accounts.
In fact, GlobalBanks USA even helps non-resident US LLCs and foreign & offshore entities.
To learn more about GlobalBanks USA, visit the product page to see how our team can help you successfully open US bank accounts!
