How does a credit union make money?

Question

Zippia Team · Accepted Answer

A credit union makes money via interest, fees, and loans. Credit unions operate much like traditional banks, except they are generally known to make less money because they charge lower interest rates, and offer their members more perks than most traditional banks.

Technically, credit unions are nonprofit organizations, but they still need to generate revenue to cover operating expenses. They do this by attaching interest and fees to the financial services they provide, such as loans.

Credit unions are set up not to turn a profit, but to focus on benefiting their members through offering most of the same financial services of a traditional bank, but with lower interest rates for their services.