What is the Difference Between a Credit Union & a Bank?

Have you ever wondered, “What is the difference between a bank and a credit union, and which one is best for my needs”? The answer is simple: Credit Unions are member-owned and non-profit organizations… Banks are not. Credit Unions are community-owned and work for the members and not for the profit of shareholders.

Banks and Credit Unions Both Serve a Purpose

They both are financial institutions licensed to receive deposits, make loans, and a wide array of other financial services. They both offer good online services, ATMs, and safety for your money via federal government-backed insurance.

So, Why Choose a Credit Union?

The main reason is that we are Friends and Family. We are not only part of the community, but we are also the community and our goal is to take care of our members. Being member-owned means looking after our members like they are family or the neighbor next door. Credit unions can range in size from small, volunteer-only operations to large entities with thousands of participants spanning the country, but all have the same mindset – focus on the communities we serve.

Not For Profit

Credit unions operate as non-profit organizations. Any profits made by the union are returned to the members with lower fees, higher savings rates, and lower loan rates. Everything is passed down to our members. We are not owned by stockholders or public traded companies. Credit unions are created, owned, and operated by our participants. As such, as a not-for-profit enterprise, we enjoy tax-exempt status giving us more ways to benefit our members.

  • Credit unions provide traditional banking services to our members without the stress of having to make stockholders happy.
  • Credit unions offer clients access to better rates and more ATM locations because we are not publicly traded and only need to make enough money to continue daily operations.
  • Credit unions are exempt from paying corporate income tax on our earnings.

Community Involvement

Members share a common bond known as the “field of membership” We work together, go to school together, we are connected geographically which forms a bond and a connection all aimed at helping each other and our community.

Community involvement is personal. Whether it is supporting a little league team, cleaning up the streets in the neighborhood, or doing a fundraiser for the local school, we all pitch in to support each other. Between volunteering and monies raised, we are truly making an impact on the community.

Did you know that there are 32.5 million small businesses in the United States? Small businesses are the backbone of our nation and they need our support. AODFCU prides itself in helping small businesses in our community succeed and making sure they are represented and protected.


Membership Requirements

Any person who is employed by any company on the Field of Membership list (Select Employer Groups) is eligible to join AOD Federal Credit Union. Additionally you qualify, if you live, work, worship or attend school in a certain census track in the following counties: Calhoun, Chambers, Cherokee, Clay, Cleburne, Coosa, Randolph, St. Clair, Talladega and Tallapoosa. Also, immediate family members of those eligible to join are also eligible to join. It is super easy to join and have access to all the benefits.

As soon as you do, you become a member and partial owner.

Remember you are more than a member – You are part owner.

Credit unions are owned by their members who use their services and we believe in starting them young. One way we encourage involvement is by teaching our younger members how to start an account and save their hard-earned money. We offer two ways to start showing kids the value of being a member and the value of money. Also, the value of completing school. We have a scholarship program for our qualified graduating members.

Another benefit to being a member of a credit union is you have a vote in determining the board of directors and decisions surrounding the union. Unlike most companies, our member’s voting ability is not based on how much money is in their account; each member gets an equal vote. It’s not about how much money you have or do not have, it is about being part of the team and contributing where you can. Check out our Membership page for more information!

Narrow Margins

Being able to work with narrow margins allows credit unions to pay higher interest rates on deposits, while also charging lower fees for other services, such as checking accounts and ATM withdrawals. In short, a credit union can save members money on loans, accounts, and savings products.

Credit unions obviously must make enough to cover operations but without the need to generate profits it allows for lower fees, account minimums, higher rates on savings, and lower borrowing rates for our members and owners.

Credit unions provide better rates on most mortgages and other loans, including 15-year and 30-year fixed mortgages, which could be a good option if you are looking to purchase a home or buy a vehicle.

Cooperative – A Common Goal

Are you looking for a place to safely put your money and have the assurance that this place has your back when you need it? At AODFCU we understand the need for family and friends. We understand the need for a community to stand together and support one another. We all have a common goal and will work as a team to make you feel like you are heard and well taken care of.

We are Not For Profit – we are For Our Members. Reach out to us with any questions and let us know how we can help.

Please contact us if you have any questions!

*Certain restrictions may apply.
For more information, visit MyCreditUnion.gov

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