What Is Credit Union?

Credit unions are cooperative financial institutions owned by their members rather than shareholders. They offer many of the same services as banks — checking and savings accounts, loans, credit cards, mortgages — but operate under a nonprofit model where earnings are returned to members through lower loan rates, higher savings rates, and lower fees.

The key regulatory distinction is that credit unions are insured by the National Credit Union Administration (NCUA) through the National Credit Union Share Insurance Fund (NCUSIF), not by the FDIC. However, the coverage is identical: $250,000 per depositor, per credit union, per ownership category. Like FDIC insurance, NCUA insurance is backed by the full faith and credit of the US government.

Credit unions are typically organized around a "common bond" — members must share some affiliation, such as working for the same employer, living in the same community, or belonging to the same organization. However, many credit unions have broadened their fields of membership so significantly that almost anyone can join. The largest credit unions, such as Navy Federal Credit Union (over $160 billion in assets), rival mid-size banks in scope and services.

BankHealthData tracks FDIC-insured banks and does not include credit unions in its database, since credit unions report to the NCUA under different regulatory frameworks. If you are considering a credit union, you can check its financial health through the NCUA's Credit Union Locator. From a safety perspective, credit unions tend to have strong capital ratios and conservative lending practices, though they can be less diversified than larger banks. The important thing for your money's safety is that your deposits are insured — whether by FDIC or NCUA — up to the $250,000 limit.