BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Typically, deposits at a bank are insured, but deposits at a credit union are not
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Banks charge overdraft fees, but credit unions do not
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Banks are owned by shareholders, while credit unions are owned by members
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Banks allow customers to do online banking, while credit unions are too small to provide that service
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Detailed explanation-1: -Credit unions are owned and governed by its members. Any person who becomes a member can actively participate in the affairs of the organization by direct voting. For example, all members participate in the election of the board of directors. On the other hand, banks are usually owned by a small group of shareholders.
Detailed explanation-2: -Credit unions are owned and controlled by the people, or members, who use their services. Your vote counts. A volunteer board of directors is elected by members to manage a credit union.
Detailed explanation-3: -Banks are generally owned by stockholders; the stockholders’ stake in the bank forms most of its equity capital, a bank’s ultimate buffer against losses. At the end of the year, a bank pays some or all of its profits to its shareholders in the form of dividends.
Detailed explanation-4: -Banks and credit unions both offer a number of financial products, including savings accounts and certificates of deposit (CDs). The main difference between the two is that banks are typically for-profit institutions while credit unions are not-for-profit and distribute their profits among its members.
Detailed explanation-5: -Their Customers Aren’t Just Members-They’re Stakeholders “On the other hand, credit unions are owned by the members, so in a credit union, you’re not just a member but also a stakeholder. If you have $20 in your account, you have the same voting rights as someone with $20, 000 in their account.