Home › Save › Bank vs. credit union
As of Oct. 13, 2026
Banks and credit unions both hold your money and make loans. The big difference is who owns them. A bank is a business owned by investors. A credit union is a not-for-profit co-op owned by its members, the people who bank there. At either one, the U.S. government insures up to $250,000 per person, per place, per kind of account, as long as it's federally insured.
Facts, not financial advice. Everything here comes from the FDIC, NCUA, the Federal Reserve and federal rules, with dates. We don't tell you where to bank. For the official insurance answer, use the FDIC or NCUA estimator.
Type what you have at one bank or credit union. Leave a box empty if it doesn't apply. We add it up the way the FDIC and NCUA describe: up to $250,000 per person, per place, per kind of account.
Where is the money?
This is simple math, not the official answer. For accounts with beneficiaries (payable-on-death), trusts and business accounts, and for the official answer, use the FDIC's EDIE estimator or the NCUA Share Insurance Estimator.
| Question | Bank | Credit union |
|---|---|---|
| Who owns it? | Investors (shareholders). A bank is a for-profit business. | Its members, the people who save and borrow there. A credit union is a not-for-profit cooperative (co-op) run by a volunteer board the members elect. |
| Where profits go | To the business and its owners. | Back to members, as lower fees, higher savings rates or lower loan rates (NCUA's description). Your savings earnings are called "dividends." |
| Who oversees it (federal) | National banks: the OCC (Office of the Comptroller of the Currency). State banks: the Federal Reserve (if a Fed member) or the FDIC, plus the state. | The NCUA (National Credit Union Administration). State-chartered credit unions also answer to their state. |
| Who can join? | Anyone the bank accepts as a customer. | Only people in its "field of membership": for example your employer, family, where you live, work, worship or go to school, or a group you belong to. |
| Deposit insurance | FDIC: $250,000 per depositor, per bank, per ownership category. | NCUA Share Insurance Fund: $250,000 per member, per credit union, per ownership category. Some state-chartered credit unions use a private insurer instead (not backed by the U.S.). |
| Backed by | The full faith and credit of the United States. | The full faith and credit of the United States (federally insured credit unions only). |
| Federal cap on loan rates | The NCUA ceiling does not apply to banks. | Federal credit unions: 15% by law, raised by the NCUA Board to 18% through Sept. 10, 2027. Payday alternative loans (PALs): up to 28%. |
| How many (June 30, 2026) | 4,238 FDIC-insured banks and savings institutions. | 4,214 federally insured credit unions with 146.1 million members. |
Sources: MyCreditUnion.gov (NCUA), Federal Reserve Board, FDIC, NCUA, NCUA press release, FDIC Quarterly Banking Profile, Second Quarter 2026, NCUA Quarterly Credit Union Data Summary, 2026 Q2.
Source: FDIC.
Source: NCUA.
Watch for private insurance. NCUA says several state-chartered credit unions are insured by private insurers, and that coverage is not backed by the full faith and credit of the United States. Check with the NCUA Credit Union Locator below.
Each credit union has a field of membership, meaning the group of people it's allowed to serve. According to NCUA's MyCreditUnion.gov, you may be able to join based on:
Source: MyCreditUnion.gov (NCUA). Each credit union's own website lists who is eligible.
NCUA publishes national average rates at credit unions and banks each quarter. The newest table posted when we checked is for Dec. 26, 2025. These are averages across thousands of places, not offers you can get.
| Product | Credit unions | Banks | Higher on average |
|---|---|---|---|
| Regular savings ($2,500) | 0.19% | 0.32% | Banks |
| Interest checking ($2,500) | 0.15% | 0.20% | Banks |
| Money market ($2,500) | 0.74% | 0.52% | Credit unions |
| 3-month CD ($10,000) | 1.96% | 1.57% | Credit unions |
| 6-month CD ($10,000) | 2.76% | 2.18% | Credit unions |
| 1-year CD ($10,000) | 2.95% | 2.29% | Credit unions |
| 2-year CD ($10,000) | 2.81% | 2.10% | Credit unions |
| 3-year CD ($10,000) | 2.75% | 2.05% | Credit unions |
| 5-year CD ($10,000) | 2.83% | 2.11% | Credit unions |
| Product | Credit unions | Banks | Higher on average |
|---|---|---|---|
| Classic credit card | 12.58% | 15.27% | Banks |
| New car loan, 60 months | 5.44% | 7.41% | Banks |
| Used car loan, 48 months | 5.53% | 7.73% | Banks |
| Unsecured loan, 36 months | 10.64% | 12.00% | Banks |
| 30-year fixed mortgage | 6.26% | 6.50% | Banks |
| Home equity line of credit (80%) | 7.13% | 7.74% | Banks |
Source: NCUA: Credit Union and Bank Rates 2025 Q4 (rates for Dec. 26, 2025; S&P Global data) (data from S&P Global Market Intelligence; 23 products in the full table). Note that banks averaged more on regular savings and interest checking in this table, while credit unions averaged more on CDs and money market and less on loans.
Source: FDIC: National Rates and Rate Caps (Sept. 2026), posted Sept. 21, 2026. FDIC's national rate is the average paid by all insured banks and credit unions it has data for, weighted by deposits. Savings and checking use the $2,500 tier; money market and CDs average the $10,000 and $100,000 tiers.
Many online banks pay far more than these averages. See today's sourced APYs (annual percentage yield, the yearly interest rate) at highest APY savings accounts and CD rates. VaultRubric does not yet track individual credit union savings rates, so we don't list any.
Sources: NCUA press release, NCUA letter 26-FCU-02, 12 CFR 701.21.
PALs are small loans that federal credit unions may offer instead of payday loans. They can charge up to 10 percentage points above the NCUA ceiling, which is 28% right now.
| Rule | PALs I | PALs II |
|---|---|---|
| Loan amount | $200 to $1,000 | Up to $2,000 |
| Length | 1 to 6 months | 1 to 12 months |
| Membership needed first | At least 1 month | No waiting period |
| Application fee | Actual cost, $20 at most | Actual cost, $20 at most |
| How many | 1 at a time; 3 at most in any 6 months (PALs I and II counted together) | Same |
| Rollovers | Not allowed; paid off in full by the end | Not allowed; no overdraft or NSF fees tied to the loan |
Sources: 12 CFR 701.21(c)(7)(iii) and (iv), MyCreditUnion.gov, NCUA Letter to Federal Credit Unions 26-FCU-02. Ask your credit union whether it offers PALs; not all do.
Our savings, CD and checking comparisons cover online banks open nationwide, not credit unions. We don't invent rates we haven't read from a source.
Sources: FDIC Quarterly Banking Profile, Second Quarter 2026 (released Aug. 25, 2026), NCUA Quarterly Credit Union Data Summary, 2026 Q2 (released Sept. 14, 2026).
At a federally insured credit union, the NCUA Share Insurance Fund insures up to $250,000 per member, per credit union, per ownership category, backed by the full faith and credit of the United States. That matches FDIC coverage at banks. NCUA notes some state-chartered credit unions use private insurers that are not federally backed; check the NCUA Credit Union Locator.
Ownership. A bank is a for-profit business owned by investors. A credit union is a not-for-profit cooperative owned by its members, who elect a volunteer board, and it can serve only people in its field of membership (MyCreditUnion.gov).
Not always. NCUA's national averages for Dec. 26, 2025 show credit unions higher on CDs (1-year 2.95% vs. 2.29%) and money market (0.74% vs. 0.52%), but banks higher on regular savings (0.32% vs. 0.19%) and interest checking (0.20% vs. 0.15%). Individual places vary widely.
Federal law sets 15%, but the NCUA Board can set a higher temporary ceiling. It is 18% through Sept. 10, 2027 (NCUA, Feb. 6, 2026). Payday alternative loans may be up to 10 percentage points higher, currently 28% (12 CFR 701.21).
Add your balances at one institution by ownership category (single, joint, IRA, and so on). Each category is insured up to $250,000 per owner. VaultRubric's quick check does that math; the FDIC's EDIE and the NCUA Share Insurance Estimator give the official answer.
No. VaultRubric republishes FDIC, NCUA and Federal Reserve facts with dates and does simple math on numbers you type. We don't recommend where to bank.
Facts and arithmetic, not financial advice. Insurance limits and rates are republished from the FDIC and NCUA with dates; the quick check is simple math, so confirm coverage with the FDIC EDIE or NCUA Share Insurance Estimator and your bank or credit union.