Credit Union

Last updated 29th Nov 2022


The term credit union refers to a not-for-profit financial institution that provides services to its members. Credit unions accept deposits and loans money to its membership in addition to other financial services.


Credit unions are member-owned cooperatives, established to provide its clients with financial services such as lending money and accepting deposits. Their not-for-profit status, along with a volunteer board of directors, allows these institutions to provide competitive interest rates on both loans and deposits.

Members of a credit union are also its owners. As such, these member / owners are able to vote volunteers to the credit union's board of directors. Individuals can gain access to credit unions in the following ways:

  • Employers: large employers oftentimes sponsor credit unions as part of a larger offering of benefits to their employees.
  • Relatives: once a member of a credit union, membership may be extended to family members too.
  • Geography: credit unions are sometimes established to service a community.
  • Affinity Groups: finally, credit unions may also be associated with affinity groups such as places of worship, boards of education, homeowners' associations, and bargaining units.

Related Terms

savings and loan association, financial system, national bank, central bank

Moneyzine Editor

Moneyzine Editor