Here are the pros of credit unions over traditional banks: They often pay higher rates on bank accounts. They offer more personalized customer service. They charge lower fees. They typically require less money to open an account. Here are the cons of choosing a credit union instead of a traditional bank: Many banks compound interest daily, but credit unions compound monthly. (Although this isn't always the case. Check before you choose your institution!) If a credit union pays a much higher rate than a bank, then you'll probably still earn more with the credit union. But if the difference in rates is minuscule, then you might want to go with a bank. Credit unions don't have as many physical branches as most national banks. Credit unions can be slower to adapt to new technology than banks. If you want high interest rates with the technology that comes with a bank, then you may want to look at opening an online high-yield savings account.