The main difference between banks and credit unions is their ownership structure:
1. Credit unions are owned by their members: This means that individuals who have accounts with a credit union are considered members and collectively own the credit union. Members typically have voting rights and may participate in decision-making processes within the credit union.
2. Banks are owned by shareholders or investors: In contrast, banks are typically owned by shareholders or investors who hold stocks in the bank. These shareholders elect a board of directors to oversee the bank's operations and make strategic decisions.
Understanding this distinction is important because it influences how each institution operates and serves its customers. Credit unions often prioritize serving the needs of their members and may offer more personalized services, while banks focus on generating profits for their shareholders.
