Banks vs Credit Unions: Which Is Right For You?

Bank vs Credit Union

Does the idea of paying fees to use your own money make you cringe? If so, you may prefer banking with a credit union or virtual bank instead. 

The biggest difference between a bank and credit union boils down to ownership. Banks work for profit and they have owners. Credit unions are nonprofits owned by their members. The main financial services a traditional bank offers–like loans, checking accounts, and savings accounts–are also available with credit union membership. 

Virtual banking is a low-cost and flexible alternative. The MoneyLion mobile bank app has the tools you need to stay on top of managing your cash. 

What is a bank?

A bank is a financial institution where you deposit your money to keep it safe. Banks offer more than just checking and savings accounts. They have an array of financial products, including loans, mortgages, and investment services. 

Banks make money on the fees and interest rates that they charge. They are for-profit entities that make money for their owners.

Although traditional banks have physical locations, many offer online banking services to make deposits or pay bills remotely. People often choose conventional banks that are convenient, charge low fees, and have robust technology solutions. 

What is a credit union?

Credit unions are nonprofit entities that their members own. Not just anyone can open an account at a credit union. You have to be a member. 

That being said, credit unions still offer the same financial products as banks. You can open a bank account, take out a loan, or get a mortgage from a credit union. 

A credit union member reaps the fruit of their profits. Members take advantage of these benefits in the form of lower fees and higher savings rates. It may be easier to take out a smaller loan from a credit union and get a better rate than you’d receive from a bank. 

Understanding your banking options

Choosing the right banking relationship comes down to what’s important to you. Whether low fees, convenience, and flexibility drive your decision, you should know what your banking options are. 


Most people turn to a bank when they want to open a checking or savings account. A checking account is used for everyday financial needs. On the other hand, the money you deposit into a savings account has a long-term purpose. You can save money for an emergency or a downpayment on a home. A good interest rate lets your savings make money for you.  

Banks are for-profit entities. They make money on the administrative fees they charge you for holding onto your money and keeping it safe. Many banks require you to keep a minimum amount of money in your bank account. Drop below this number, and the bank may charge a fee. 

You can also incur fees if you use an out-of-network ATM or request paper statements. Many banks charge a monthly fee to maintain your account. Some banks may waive fees if you elect to have your paychecks directly deposited into your account.

Traditional banks have many physical locations, making it easy to find one close to home or near your workplace. Most banks also offer online services where you can deposit mobile checks or pay bills from the comfort of your home. People typically choose traditional banks for their convenience and online services. 

Credit union

Credit unions offer the same financial products that you’ll find at a bank like checking accounts, savings accounts, mortgages, loans, and other financial services. The main difference is that members own credit unions. 

As such, the credit union doesn’t have to rely on charging high fees or paying out lower interest rates to pay their owners the way a bank does. Instead, members benefit from higher interest rates on their savings accounts and lower fees.

Since members have ownership in a credit union, they must keep a minimum balance in their accounts. You may be charged a fee or have your account closed if you fall below the minimum required balance. 

Credit unions are known for their individualized service. It may be easier to get a loan through a credit union than a bank. Credit unions can typically lend money in smaller amounts and at a lower interest rate as well. 

However, with so few locations, credit unions aren’t always convenient. Many credit unions offer online banking services, yet their technology may be less robust than what you’d find at a bank. 


With a RoarMoney SM account, you can experience the convenience of virtual banking. The MoneyLion mobile banking app gives you the tools you need to stay on top of your money, right from your phone. 

Sign up for a RoarMoney bank account for just $1 per month to get benefits like:

  • No minimum balance required 
  • No fees at over 55,000 ATMs 
  • Get paid up to two days early when you set up direct deposit
  • Setup a virtual debit card when you open your account 

Need a little extra money? With Instacash SM, you can get a cash advance of up to $250 in just a few minutes. There are no credit checks, no monthly fees, and no interest involved. Just apply through the MoneyLion app, and you’ll see some extra cash in your RoarMoney account in no time. 

Comparing fees between traditional banks, credit unions, and RoarMoney

Surveys show traditional banking fees like the following:

FeesTraditional bankCredit unionRoarMoney
Out of network ATM fee $4.64$0.20$2.50
Administrative fee$9.40 monthly$2.00 monthly$1.00 monthly
Minimum balance fee$7.00-$12.00$0-$10.00$0
Foreign transaction fee1%-3%1.15%$0
Early paydayN/AN/A$0

Bank differently with RoarMoney

Banks and credit unions are a safe place to keep your money. The one that works best for you or how many bank accounts you have often comes down to your personal preference. Credit unions have lower fees and may pay higher interest, yet they are less convenient and have stricter membership rules than banks. Traditional banks have plenty of locations but they charge more money and pay lower interest rates on savings accounts than credit unions. 
Bank differently with MoneyLion. Open a RoarMoney account and get paid up to two days early. With a RoarMoney account, you’ll experience cashback rewards, 0% APR cash advances with Instacash, and no hidden fees, all from the app on your phone. You can also build credit with our Credit Builder Plus membership! You can even invest in your future with our fully-amanaged investment portfolio and automated investing programs.

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Open a RoarMoney account to bank with no minimums, no hidden fees, no BS! And you’ll love the perks like a contactless debit card, early payday, cashback, and fraud protection.

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