Credit unions typically are able to offer a better deal to their customers than banks can afford to do. They do not have all the overhead costs that a big bank has to pay, and any surpluses the union realises are added to members’ bonuses and distributed. Credit unions are not under pressure from shareholders to maximise their profits, as banks are.
They are therefore able to accept deposits at higher rates than would be profitable for banks, and make loans at somewhat better rates than banks are able to do. Therefore, as financial systems are modernised in many countries, credit unions come to play an increasing role in the provision of financial services to households.