You probably know a lot about banks, but you might not be as familiar with credit unions.

Credit unions are not-for-profit financial cooperatives that exist to serve their members rather than to maximize corporate profits.

Member Owned

While the products offered at a credit union may be similar as at a bank, the structure and reasoning behind the scenes couldn’t be more different. When you make your initial deposit, you’re actually buying a share of the company. Rather than being a customer, you’re part owner. That’s why your account is called a “share.”

Better Rates, Fewer Fees

Like banks, credit unions accept deposits and make loans. Fees and loan rates at credit unions are generally lower, while interest rates returned are generally higher, than banks and other for-profit institutions.

Democratically Operated

Credit unions are democratically operated by members, and the board of directors is made up of volunteers from the membership. Directors are elected by the membership and each member gets one ballot, giving them an equal say in how the credit union is operated, regardless of how much they have invested in the credit union.

Not For Profit

Credit unions aren’t run for profit, which means a lot of the concerns and scary decisions of larger banks never even come up. Of course, “not for profit” isn’t the same as a “nonprofit” organization since credit unions don’t rely on donations. Any profits are returned to the membership in the form of better rates on loans and savings, lower fees, and improved services.

Credit Union vs Bank

Credit Unions

Commercial Banks

StructureNot-for-profit, member-owned financial cooperatives funded largely by voluntary member depositsFor-profit institutions owned by stockholders
ClienteleMembers share a common bond, such as where they live, work or worship. Service to the poor is blended with service to a broader spectrum of the population, which allows credit unions to offer competitive rates and fees.Typically serve middle-to-high income clients. No restrictions on clientele.
GovernanceCredit union members elect a volunteer board of directors from their membership. Members each have one vote in board elections, regardless of their amount of savings or shares in the credit union.Stockholders vote for a paid board of directors who may not be from the community or use the bank’s services. Votes are weighted based on the amount of stock owned.
EarningsNet income is applied to lower interest on loans, higher interest on savings or new product and service development.Stockholders receive a pro-rata share of profits.
Products & ServicesFull range of financial services, primarily savings, credit, remittances and insurance.Full range of financial services, including investment opportunities.
Service DeliveryMain office, shared branching, ATMs, POS devices, PDAs, cell phones, InternetMain office, shared branching, ATMs, POS devices, PDAs, cell phones, Internet

More Credit Union Resources

Meet Harvard FCU

Learn more about the philosophy and structure unique to the Harvard Federal Credit Union.


Get information about Harvard FCU services and see how you could benefit from being a member.


Membership at Harvard FCU is available to many Harvard affiliated organizations. Find out if you qualify.

Credit Union members enjoy top quality financial services with a level of personal service that you can’t get at a commercial bank.

Our full line of loan and deposit options mean that you will get everything you need right here. And whether you’re opening a checking account, applying for a mortgage, or just looking for some sound advice, our expert staff will make your CU experience easy and comfortable.