Credit Unions Explained: 10 Questions Answered
November 9, 2026
A credit union is a financial institution owned by its Members and built to serve the people who use its services, not outside shareholders. Credit unions are not-for-profit, so they return value to Members through service, ownership, and community focus. At Redwood Credit Union, Members also have access to full-service banking, digital banking, and federally insured deposits through the National Credit Union Administration (NCUA).
Here are answers to 10 common questions about how credit unions work and what sets them apart.
1. What is a credit union?
A credit union is a financial institution that serves Members who share a common bond, such as living or working in a defined area. Credit unions offer the same everyday services people expect from a bank, including checking and savings accounts, loans, credit cards, and digital banking.
The biggest difference is structure. Credit unions are cooperatives, so the people who bank there are also the owners.
2. How is a credit union different from a bank?
Credit unions are cooperatives where each Member is also an equal owner. While for-profit financial institutions exist to generate profits for a small number of private stockholders, credit unions return their earnings to all Members in the form of better rates, fewer and lower fees, and added services such as new branches and technology.
With the cooperative model, the funds you deposit at Redwood Credit Union support our local communities and beyond. Your money is lent out to help family, friends, and neighbors do things like finance a new car, get their first home loan, or even start their dream business.
3. What does Member-owned mean?
Member-owned means each Member is a part owner of the credit union. Every Member has equal ownership and an equal voice through the election of a volunteer Board of Directors.
4. Why do people say credit unions are not-for-profit?
Credit unions are not-for-profit because they are organized to serve Members, not to generate profits for outside stockholders. That means earnings are given back to the Members in the form of better rates, low or no fees, investments in new technologies, and in support of the credit union’s mission.
At Redwood Credit Union, the cooperative model helps keep the focus on Member service and community impact.
5. Are credit union deposits safe?
Yes. Credit unions are known for offering exceptional value and trusted financial solutions, and for being responsible lenders and adhering to prudent investment strategies. Deposits at Redwood Credit Union are federally insured by the National Credit Union Administration (NCUA), a U.S. government agency. This federal insurance applies to deposits up to at least $250,000, which is the same level of federal insurance offered by banks.
That protection is one reason many people feel comfortable keeping savings at a credit union. Redwood Credit Union is also conservative with the deposits it receives and maintains strong equity reserves and liquid investments.
6. What kinds of services do credit unions offer?
Credit unions are full-service financial institutions. They offer a wide variety of financial services for consumers and business owners, including checking and savings accounts, auto and mortgage loans, credit cards, digital banking, and more.
At Redwood Credit Union, Members also have access to a full-service insurance agency1 and a no-haggle auto sales center.2
7. Who can join a credit union?
Who can join depends on the credit union’s defined field of membership, which is the group of people or businesses it serves. Some credit unions serve specific employers or communities, while others serve broader geographic areas.
Redwood Credit Union is a community credit union serving anyone living or working in the following California counties: Sonoma, Marin, Napa, Mendocino, Lake, San Francisco, Contra Costa, and Solano. Family members of current Members can also join, no matter where they live. At Redwood Credit Union, opening a membership just requires a minimum $5 savings deposit.
8. Who is on the board of directors at a credit union?
Credit unions are owned by the Members who have joined the credit union. Each Member has equal ownership and an equal voice in electing a credit union’s volunteer Board of Directors, comprised of Members who volunteer their time to set strategic direction and policies for the credit union.
Redwood Credit Union has nine volunteer Board Members, as well as a five-member volunteer Audit & Enterprise Risk Committee, appointed by the Board.
9. Why do people choose a credit union?
People choose a credit union because it is built around ownership, service, and community. Credit unions focus on helping Members improve their lives and support their communities.
For many people, that means joining an institution where their deposits support lending to neighbors, local families, and businesses in the community.
10. What should I know if I am considering Redwood Credit Union?
You should know that Redwood Credit Union is a not-for-profit financial cooperative owned by its Members, and deposits are federally insured by NCUA. In addition to full-service banking in our branches and online or our mobile app, RCU also offers added services, including a full-service insurance agency1 and a no-haggle auto sales center,2 to provide a one-stop-shop for all your financial needs.
Learn more about RCU’s mission, leadership, community and social impact, awards, and history.
Disclosures
1Insurance products are not deposits of Redwood Credit Union and are not protected by the NCUA. They are not an obligation of or guaranteed by Redwood Credit Union and may be subject to risk. Any insurance required as a condition of an extension of credit by Redwood Credit Union need not be purchased from Redwood Credit Union and may be purchased from an agent or an insurance company of the member’s choice. RCU Insurance Services is a wholly owned subsidiary of Redwood Credit Union. Business conducted with RCU Insurance Services is separate and distinct from any business conducted with Redwood Credit Union. License no. 0D91054. NPN no. 7612227.
2Auto sales provided by RCU Auto Services, RCU’s wholly owned subsidiary.
PPP Forgiveness Application Deadline
Congress passed The Economic Aid Act which changed the deferment period from 6 months post covered period to 10 months post covered period. For example, if your covered period ended June 30, 2021, under the new guidelines the earliest your first loan payment wouldn’t be due until April 2022, and you have until then to request forgiveness. Please use the following calculation to help you identify when your forgiveness will be due:
- PPP borrowers may select a covered period anywhere from 8 weeks to 24 weeks.
- RCU is automatically calculating your loan due date based on a 24-week covered period, if you intend on using a shorter covered period please inform us immediately as this will impact your due date.
- Your correct deadline will be reflected in your online banking account.
If all or part of your PPP loan is not forgiven, your first loan payment will be due the first of the following month after a decision is made by the SBA.
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