Credit Union vs Bank: What's the Difference?
- 11 minutes ago
- 3 min read
Deciding between a credit union and a bank can be difficult.
Both offer ways to save and borrow money, but they're built for different purposes.
Here's how they compare.
Credit Union vs Bank: At a Glance
Credit Union | Bank |
Owned by its members | Usually owned by shareholders |
Not for profit | For profit business |
Profits are reinvested into member services | Profits are usually paid to shareholders |
Offers savings accounts, loans and Cash ISAs | Offers a wider range of financial products |
Membership is usually based on where you work or live | Generally open to anyone |
Savings protected by the FSCS (up to £120,000) | Savings protected by the FSCS (up to £120,000) |
What is a credit union?
A credit union is a member owned financial cooperative that helps people save regularly and borrow responsibly.
Instead of generating profits for external shareholders, any surplus is reinvested into improving services, supporting members and maintaining the long-term strength of the credit union.
Most credit unions offer products such as:
Savings accounts
Personal loans
Cash ISAs
Junior savings accounts
Payroll saving (where available)
Across Great Britain, more than 1.5 million people are members of a credit union (All Together Money, 2024), choosing them as part of their everyday finances.
What's the biggest difference?
The biggest difference isn't the products. It's ownership.
With a bank, you're usually a customer.
With a credit union, you're also a member and part owner.
That difference shapes how the organisation operates. While banks aim to generate returns for shareholders, credit unions focus on delivering value for members through affordable borrowing, encouraging regular saving and investing back into member services.
Are credit unions safe?
Yes. Your money receives the same level of protection as it would with most UK banks.
Credit unions are authorised by the Prudential Regulation Authority (PRA) and regulated by the Financial Conduct Authority (FCA), just like banks.
Eligible savings are also protected by the Financial Services Compensation Scheme (FSCS) up to £120,000 per person, per authorised institution.
Are credit unions better than banks?
Neither is better. They simply suit different needs, and many people choose to use both.
For example, many Plane Saver Credit Union members keep their everyday banking with a high street bank while using their credit union to save directly from their salary, access affordable loans or build their savings for future goals.
A bank may be the better choice if you need:
A current account for everyday banking
International payments
Business banking
A wide range of investment products
A credit union may suit you better if you're looking for:
Affordable loans
Regular saving
Payroll saving through your employer
Cash ISAs
Financial wellbeing support
Discover one of the UK's largest Credit Unions
Plane Saver supports more than 35,000+ members with savings accounts, affordable loans, Cash ISAs, payroll saving and financial wellbeing support.
Whether you're looking to build your savings, borrow responsibly or simply understand your options, we're here to help.
Explore our membership and discover how Plane Saver could support your financial goals.
Frequently Asked Questions
Can anyone join a credit union?
Every credit union has its own membership criteria, known as a common bond. This is often based on where you live, where you work or the organisation you're employed by.
Are credit unions covered by the FSCS?
Yes. Eligible savings are protected by the Financial Services Compensation Scheme (FSCS) up to £120,000 per person, per authorised institution.
Can I keep my bank account if I join a credit union?
Yes. Many people use both, keeping their current account with a bank while using a credit union for savings and affordable loans.
