Credit Unions

Per Investopedia, Credit unions are financial cooperatives that provide traditional banking services to their members but, unlike banks, they are not-for-profit institutions created for and managed by their members (or customers). Credit unions provide routine banking services to their clients, who are generally called members.

Credit unions are created, owned, and operated by their clients, and are generally tax-exempt. Members purchase shares in the co-op, and that money is pooled together to fund the credit union’s loans.

Credit Unions tend to have fewer products than traditional banks but offer clients access to better rates and more ATM locations. They can do so because they 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 their earnings.