Credit unions and banks offer many of the same products, including checking and savings accounts, auto loans, mortgages, and credit cards. The difference is in who owns them and where the profits go.
Ownership
A bank is usually a for-profit company owned by shareholders. A credit union is a not-for-profit cooperative owned by its members, meaning the people who hold accounts there. Each member typically gets one vote in board elections, regardless of how much money they have on deposit.
Fees and rates
Because a credit union does not need to pay outside shareholders, surplus income is often returned to members as lower loan rates, higher savings rates, or fewer fees. That is a tendency, not a guarantee, so compare specific offers before you choose.
Deposit insurance
In the United States, bank deposits are generally insured by the FDIC and credit union deposits by the NCUA, both up to $250,000 per depositor, per institution, per ownership category. In practice your insured deposits are protected the same way at either one.
Membership
Banks will open an account for almost anyone. Credit unions have a "field of membership," which might be based on where you live, where you work, or an organization you belong to. Many have broad eligibility, so check before assuming you do not qualify.
Technology and branches
Large banks often have more branches and more polished apps. Many credit unions offset this through shared branching networks and surcharge-free ATM networks, which let members use thousands of locations nationwide.
The bottom line
Neither option is always better. Compare the total cost of the products you actually use: monthly fees, overdraft policies, loan rates, and ATM access.