Credit unions are financial institutions that function like banks in that they allow consumers to store their money in deposit accounts and then use the pooled resources to help meet members' short- and long-term financial goals.
Credit unions are nonprofit organizations that pool their members’ deposits and use them for loans and other services. This structure differs from a bank’s because a bank is a for-profit entity, complete with customers and stakeholders.
Credit unions are often formed as a way to provide financial support for a specific group of people, including those in certain industries or communities, which results in limited membership. The best credit unions offer major perks that include lower interest rates, personalized customer service and fewer account fees.