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Credit Union vs. Bank: Why Credit Unions Exist 

Central One Shrewsbury Branch

Most people know what a bank is. 

But ask someone what a credit union is, and chances are they aren’t entirely sure. 

The biggest difference between a credit union and a bank isn’t found in a checking account, loan, or credit card. 

It’s why they were created in the first place. 

Why Credit Unions Were Created 

More than a century ago, everyday financial services weren’t accessible to just anyone. 

Factory workers, immigrants, laborers, and people with limited financial resources found it difficult to borrow money, save securely, or build financial stability.  

Traditional financial institutions focused on serving wealthier customers, leaving many working-class families with limited options. 

In response, groups of people began pooling their money together to help one another save, borrow, and achieve financial goals. 

These groups became known as credit unions. 

The name itself tells the story. 

Credit refers to borrowing money. 

Union refers to people coming together through a shared bond. 

Whether that bond was a workplace, church, neighborhood, or organization, the idea was simple: people helping people.

Central One’s Story 

Central One was founded in 1952 by employees of the New England Electric System who wanted a trusted place to save money and access fair financial services. 

Like many credit unions, we started by serving a specific group of people connected through a common bond. 

As our membership grew, so did our ability to serve others. In 1998, Central One transitioned to a community-based credit union, allowing us to expand membership and help more individuals, families, and businesses throughout the communities we serve today. 

While a lot has changed since 1952, our commitment to helping people improve their financial well-being remains the same. 

You’re Not Just a Customer 

One of the biggest differences between a credit union and a bank comes down to a single word: member. 

At a bank, the people who use the institution’s products and services are customers. 

At a credit union, they’re members. 

While that may sound like a small distinction, it reflects a fundamental difference in how credit unions operate. 

Credit unions are member-owned financial cooperatives. When you join a credit union, you become a member and part-owner of the organization. That means the people who own the credit union are the same people it exists to serve, rather than outside investors or shareholders. 

While becoming a member doesn’t mean you’ll be making day-to-day operational decisions, it does mean the credit union’s success is tied to the success of its members, including you! 

At Central One, being member-owned means every decision starts with the same question: 

How can we create value for the people and communities we serve? 

Who Can Join a Credit Union? 

One of the biggest misconceptions about credit unions is that membership is difficult to obtain. 

Historically, membership was often tied to a common bond, such as working for a particular employer, belonging to a religious organization, or living within a certain community.

Today, many credit unions have expanded membership eligibility to serve many communities in alarger geographic area. 

At Central One, membership is available to individuals who live or have family who live, work or worship in our field of membership. 

Curious if you qualify? Click here to check membership eligibility information here. 

Not for Profit Doesn’t Mean We Don’t Make Money 

Another common misconception is that credit unions don’t make money. 

Credit unions still generate revenue through loans, services, and other financial products. That revenue allows us to operate branches, invest in technology, provide digital banking tools, offer employee benefits, and continue improving the member experience. 

The difference is what happens after expenses are paid. 

Rather than distributing profits to outside investors or shareholders, credit unions reinvest earnings into the credit union and its members through things like: 

  • Competitive loan rates  
  • Lower fees  
  • New products and services  
  • Financial education programs  
  • Community investments  

As a member-owned financial cooperative, our goal isn’t maximizing profits for shareholders. It’s creating value for our members. 

Who Makes the Decisions? 

Credit unions are also governed differently than banks. 

At Central One, our Board of Directors is made up entirely of volunteers who are also members of the credit union. 

These individuals donate their time and expertise to help guide the organization and ensure it remains financially strong while staying true to its mission. 

Because they are members themselves, they understand firsthand what matters most to the people we serve. 

It’s one more way the credit union model keeps members at the center of decision-making. 

More Than Banking 

The credit union philosophy of people helping people extends far beyond financial products. 

We believe strong communities create stronger futures. 

From supporting organizations like African Community Education (ACE), participating in Habitat for Humanity’s Operation Playhouse, we’re committed to creating positive change both inside and outside our branches. 

Being a credit union has never been just about banking. 

It’s about focusing on the people we serve and investing in the health of their communities and financial futures. 

Why It Still Matters Today 

Today, many people are asking important questions about where they spend, save, and invest their money. 

They want transparency, value, and organizations that genuinely care about the communities they serve. 

Credit unions were created to provide people with access to fair financial services.  

More than a century later, that mission still guides everything we do.  

That’s the credit union difference. 

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Adjustable Rate Mortgages

  • The 15/5 Adjustable Rate Mortgage offers a fixed APR of for the first 15 years then adjusts to a new rate every 5 years.

    Term: Available for terms up to 40 years.

    Rate caps: 2% per adjustment and 5% over the initial rate for the life of the loan.

    Benefits: Central One’s ARMs often have lower down payment requirements, lower initial monthly payments and lower initial APRs than a 30 year fixed rate.

    Calculate your monthly payment using the ARM Mortgage Calculator

    Prior to applying, please make sure your credit is not frozen by the credit reporting agencies, or we will not be able to process your application. Payments do not include taxes and insurance. 

    Begin the Application Process Check Rates

  • The 15/5 Adjustable Rate Mortgage offers a fixed APR of for the first 15 years then adjusts to a new rate every 5 years.

    Term: Available for terms up to 40 years.

    Rate caps: 2% per adjustment and 5% over the initial rate for the life of the loan.

    Benefits: Central One’s ARMs often have lower down payment requirements, lower initial monthly payments and lower initial APRs than a 30 year fixed rate.

    Calculate your monthly payment using the ARM Mortgage Calculator

    Prior to applying, please make sure your credit is not frozen by the credit reporting agencies or we will not be able to process your application. Payments do not include taxes and insurance. 

     

    Begin the Application Process Check Rates

  • The 10/5 Adjustable Rate Mortgage offers a fixed APR of for the first 10 years then adjusts to a new rate every 5 years.

    Term: Available for terms up to 30 years.

    Rate caps: 2% per adjustment and 5% over the initial rate for the life of the loan.

    Benefits: Central One’s ARMs often have lower down payment requirements, lower initial monthly payments and lower initial APRs than a 30 year fixed rate.

    Calculate your monthly payment using the ARM Mortgage Calculator

    Prior to applying, please make sure your credit is not frozen by the credit reporting agencies or we will not be able to process your application. Payments do not include taxes and insurance. 

     

    Begin the Application Process Check Rates

  • The 10/5 Adjustable Rate Mortgage offers a fixed APR of for the first 10 years then adjusts to a new rate every 5 years.

     

    Term: Available for terms up to 30 years.

    Rate caps: 2% per adjustment and 5% over the initial rate for the life of the loan.

    Benefits: Central One’s ARMs often have lower down payment requirements, lower initial monthly payments and lower initial APRs than a 30-year fixed rate.

     

    Calculate your monthly payment using the ARM Mortgage Calculator

    Prior to applying, please make sure your credit is not frozen by the credit reporting agencies, or we will not be able to process your application.

     

    Begin the Application Process Check Rates

  • The 5/1 Adjustable Rate Mortgage offers a fixed APR of for the first 5 years then adjusts to a new rate every 1 year.

     

    Term: Available for terms up to 30 years.

    Rate caps: 2% per adjustment and 5% over the initial rate for the life of the loan.

    Benefits: Central One’s ARMs often have lower down payment requirements, lower initial monthly payments and lower initial APRs than a 30-year fixed rate.

     

    Calculate your monthly payment using the ARM Mortgage Calculator

    Prior to applying, please make sure your credit is not frozen by the credit reporting agencies or we will not be able to process your application.

     

    Begin the Application Process Check Rates

  • The 5/1 Adjustable Rate Mortgage offers a fixed APR of for the first 5 years then adjusts to a new rate every 1 year.

     

    Term: Available for terms up to 30 years.

    Rate caps: 2% per adjustment and 5% over the initial rate for the life of the loan.

    Benefits: Central One’s ARMs often have lower down payment requirements, lower initial monthly payments and lower initial APRs than a 30 year fixed rate.

     

    Calculate your monthly payment using the ARM Mortgage Calculator

    Prior to applying, please make sure your credit is not frozen by the credit reporting agencies, or we will not be able to process your application.

     

    Begin the Application Process Check Rates

  • The 3/3 Adjustable Rate Mortgage offers a fixed APR of for the first 3 years then adjusts to a new rate every 3 years.

     

    Term: Available for terms up to 30 years.

    Rate caps: 2% per adjustment and 5% over the initial rate for the life of the loan.

    Benefits: Central One’s ARMs often have lower down payment requirements, lower initial monthly payments and lower initial APRs than a 30 year fixed rate.

     

    Calculate your monthly payment using the ARM Mortgage Calculator

    Prior to applying, please make sure your credit is not frozen by the credit reporting agencies or we will not be able to process your application.

     

    Begin the Application Process Check Rates

  • The 3/3 Adjustable Rate Mortgage offers a fixed APR of for the first 3 years then adjusts to a new rate every 3 years.

     

    Term: Available for terms up to 30 years.

    Rate caps: 2% per adjustment and 5% over the initial rate for the life of the loan.

    Benefits: Central One’s ARMs often have lower down payment requirements, lower initial monthly payments and lower initial APRs than a 30 year fixed rate.

     

    Calculate your monthly payment using the ARM Mortgage Calculator

    Prior to applying, please make sure your credit is not frozen by the credit reporting agencies or we will not be able to process your application.

     

    Begin the Application Process Check Rates

  • The 1/1 Adjustable Rate Mortgage offers a fixed APR of for the first 1 year then adjusts to a new rate every 1 year.

     

    Term: Available for terms up to 30 years.

    Rate caps: 2% per adjustment and 5% over the initial rate for the life of the loan.

    Benefits: Central One’s ARMs often have lower down payment requirements, lower initial monthly payments and lower initial APRs than a 30-year fixed rate.

     

    Calculate your monthly payment using the ARM Mortgage Calculator

    Prior to applying, please make sure your credit is not frozen by the credit reporting agencies or we will not be able to process your application.

     

    Begin the Application Process Check Rates

  • The 1/1 Adjustable Rate Mortgage offers a fixed APR of for the first 1 year then adjusts to a new rate every 1 year.

     

    Term: Available for terms up to 30 years.

    Rate caps: 2% per adjustment and 5% over the initial rate for the life of the loan.

    Benefits: Central One’s ARMs often have lower down payment requirements, lower initial monthly payments and lower initial APRs than a 30 year fixed rate.

     

    Calculate your monthly payment using the ARM Mortgage Calculator

    Prior to applying, please make sure your credit is not frozen by the credit reporting agencies or we will not be able to process your application.

     

    Begin the Application Process Check Rates

Order Checks for your Home Equity Line of Credit (HELOC)

You can order checks through this link Order Checks or by calling 800-355-8123. You will need to input your account number and the Central One routing number (211387169). As a security precaution, you will not be able to change the address on the checks and all orders will be sent to the address of record on the account.

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