Bank of America is a commercial bank, not a credit union
Bank of America operates as a for-profit commercial bank owned by shareholders, not as a credit union. The difference matters because it changes how the institution makes money, who can join, and what happens to any profits the organization makes.
A credit union is a nonprofit cooperative owned by its members — the people who hold accounts there. Any profit a credit union makes gets returned to members through better rates, lower fees, or improved services. Bank of America keeps profits and distributes them to shareholders instead. This is a fundamental structural difference, not just a naming convention.
Bank of America is one of the largest commercial banks in the United States by assets and customer base. It operates thousands of branches nationwide and offers the full range of services you would expect from a major bank: checking and savings accounts, credit cards, mortgages, investment services, and business banking.
Key Takeaways
- Bank of America is a for-profit commercial bank owned by shareholders, while credit unions are nonprofit cooperatives owned by their members.
- Credit unions typically offer lower fees and better rates on savings accounts and loans because they return profits to members rather than shareholders.
- Bank of America has no membership requirement — anyone can open an account, whereas credit unions often limit membership to people who meet specific criteria.
- If you want a credit union experience, you would need to join an actual credit union; Bank of America cannot function as one because of its corporate structure.
How commercial banks and credit unions differ in structure
The ownership model creates a chain of different incentives. When Bank of America makes money on fees, interest spreads, or investment services, that money flows to shareholders who own stock in the company. When a credit union makes money the same way, it belongs to the members who hold accounts there.
This means a credit union has a direct financial reason to keep fees low and offer competitive rates — doing so benefits the same people who own the institution. A commercial bank like Bank of America has a reason to maximize profits for shareholders, which can mean higher fees and lower deposit rates, though competitive pressure in the market still constrains how far any bank can push.
Credit unions also tend to be smaller and more locally focused. They often serve a specific community or profession — teachers, nurses, federal employees, or people who live in a particular county. Bank of America serves anyone, anywhere, with no membership criteria beyond being able to open an account.
What this means for fees and interest rates
Credit unions historically offer lower monthly maintenance fees and higher interest rates on savings accounts because they operate on a nonprofit model and have lower overhead. Bank of America charges monthly fees on many account types (though some can be waived with direct deposit or minimum balances) and typically offers lower interest rates on savings accounts than credit unions do.
The fee structure at Bank of America reflects its size and the cost of maintaining thousands of branches nationwide. A credit union with one or two locations can operate more cheaply. That said, Bank of America's fees are not unusual for a large commercial bank, and competitive pressure means rates and fees shift over time.
If you are primarily interested in low fees and high savings rates, a credit union may serve you better. If you need the branch network, ATM access, or specific services Bank of America offers, the fee difference may be worth it to you.
Who can join Bank of America versus a credit union
Bank of America has no membership requirement. You can walk into a branch or open an account online if you meet basic identity and age requirements. You do not need to work in a particular field, live in a particular place, or have any affiliation with any group.
Credit unions restrict membership. Some serve only federal employees, others only people who work in healthcare, still others only residents of a specific county or state. You have to meet the membership criteria before you can open an account. This restriction helps credit unions maintain their community focus and keep decision-making power in the hands of people with shared interests.
This openness is one reason Bank of America has so many customers — there is no barrier to entry. It is also why credit unions tend to have stronger community ties and more member involvement in how the institution operates.
The regulatory and operational differences
Both banks and credit unions are regulated, but by different agencies and under different rules. Bank of America is regulated by the Office of the Comptroller of the Currency (OCC) and the Federal Reserve, among others. Credit unions are regulated by the National Credit Union Administration (NCUA).
Both types of institutions offer deposit insurance. Bank of America deposits are insured by the Federal Deposit Insurance Corporation (FDIC) up to $250,000 per account category. Credit union deposits are insured by the NCUA up to the same limit. In both cases, your money is protected if the institution fails.
The operational difference is that credit unions are member-owned and member-governed. Members vote on the board of directors and have a say in major decisions. Bank of America is governed by a board elected by shareholders, and customers have no voting power.
When Bank of America might still be the right choice
Bank of America's size and reach matter if you travel frequently, move often, or need services that only large banks offer. The branch and ATM network is extensive. If you use business banking, investment services, or international transfers regularly, Bank of America has infrastructure and informed that smaller credit unions may not.
Bank of America also offers services credit unions typically do not — wealth management for high-net-worth customers, complex commercial lending, and integration with investment platforms. If you need these services, you are not choosing between Bank of America and a credit union; you are choosing Bank of America because the credit union option does not exist.
For basic checking and savings, a credit union may offer better rates and lower fees. For everything else, your choice depends on what services you actually need and whether the fee difference justifies switching.
How to find a credit union if you want one
The NCUA maintains a searchable database of all federally insured credit unions at CUFinder.org. You can search by location, employer, or membership criteria to find credit unions you might join. Some credit unions also allow you to join if you live or work in their service area, even if you do not meet the primary membership criterion.
Many people belong to both a credit union and a commercial bank. You might use a credit union for savings and loans because of better rates, and a commercial bank like Bank of America for checking and convenience. There is no rule against holding accounts at both.
Frequently Asked Questions
Can I switch from Bank of America to a credit union?
Yes. You can open a credit union account if you meet their membership criteria, then transfer your money and set up new direct deposits. Your old Bank of America account can stay open or you can close it. There is no penalty for leaving, though you should check whether you have any outstanding checks or automatic payments still using that account.
Do credit unions have the same protections as Bank of America?
Both offer deposit insurance up to $250,000 per account category through their respective insurers (FDIC for banks, NCUA for credit unions). Both are regulated by federal agencies. The protections are equivalent, though the regulatory agencies are different.
Why does Bank of America charge monthly fees if credit unions don't?
Credit unions operate on a nonprofit model and often have lower overhead because they are smaller and more localized. Bank of America maintains thousands of branches and pays shareholders, which costs more. Some Bank of America accounts waive monthly fees if you meet requirements like direct deposit or minimum balance.
Can I use Bank of America ATMs if I join a credit union?
Not automatically. Some credit unions participate in shared branching networks or ATM alliances that give members access to other institutions' ATMs, but this varies by credit union. You would need to ask your specific credit union what ATM access they offer.
Is Bank of America safer than a credit union?
Both are safe in the sense that deposits are insured and both are regulated. Bank of America's size means it is unlikely to fail, but that does not make it safer than a credit union — credit union deposits are equally protected by insurance. Safety depends on the specific institution, not on whether it is a bank or credit union.