# Credit Union

*Banking & Payments — Finicade finance glossary*

A credit union is a member-owned cooperative that takes deposits and lends, returning surplus to members through better rates rather than to shareholders. Membership is usually tied to an employer, region or affiliation. Because they're not profit-maximising, credit unions typically offer higher deposit rates and lower loan rates, and they're the standard alternative to payday lending for small-dollar borrowing.

**Also known as:** building society, mutual, cooperative bank

**Related terms:** [Commercial Bank](https://finicade.com/glossary/commercial-bank), [Deposit Insurance](https://finicade.com/glossary/deposit-insurance), [Neobank](https://finicade.com/glossary/neobank), [Payday Loan](https://finicade.com/glossary/payday-loan), [Savings Account](https://finicade.com/glossary/savings-account)

Source: https://finicade.com/glossary/credit-union