Skip to Main Content

Which is safer: bank or credit union?

Bankrate Logo

Why you can trust Bankrate

While we adhere to strict , this post may contain references to products from our partners. Here's an explanation for .

Dear Dr. Don,
In choosing between a bank and a credit union as a place to park my money, is one really any safer over another — a credit union over a bank, or vice versa?
— Concerned Kay

Dear Kay,
My opinion is that as long as your deposits, or shares for a credit union, are insured, there’s no real reason to be concerned about safety. Insured deposits are backed by the full faith and credit of the United States government — over and above the reserves held by the insurance fund.

An earlier column, “U.S. government stands behind deposits,” explains this in greater depth, and does allow for a little bit of doubt about the funding of that full faith and credit guarantee. However, as I said in that column and repeat here, I wouldn’t let that doubt keep you from making an insured deposit.

If you shop rates using Bankrate’s Compare Rates feature, you’ll see that the site provides you with the financial institution’s Safe & Sound rating. If you’re comparing two financial institutions with the same CD rate, pick the one with the higher Safe & Sound rating. Otherwise, feel free to chase yield with your insured deposits.

Get more news, money-saving tips and expert advice by signing up for a free Bankrate newsletter.

Ask the adviser

To ask a question of Dr. Don, go to the “Ask the Experts” page and select one of these topics: “Financing a home,” “Saving & Investing” or “Money.” Read more Dr. Don columns for additional personal finance advice.

Bankrate’s content, including the guidance of its advice-and-expert columns and this website, is intended only to assist you with financial decisions. The content is broad in scope and does not consider your personal financial situation. Bankrate recommends that you seek the advice of advisers who are fully aware of your individual circumstances before making any final decisions or implementing any financial strategy. Please remember that your use of this website is governed by Bankrate’s Terms of Use.