Credit unions are classified among non-profit organizations. Nearly every country has some credit unions, owned and managed by the members of the respective credit union. Because the aim of such unions is not to offer enhanced profit to their members, they offer loans to common people at low rates of interest while depositors can expect higher returns.
Commercial banks play a significant role in stabilizing the economy of any country. Since they have to compete among themselves commercial banks provide a number of services and facilities to their clients. As they aim to earn higher profits, the rates of interest they offer to depositors are low while the interest charged on loans they extend to consumers are not really attractive.
The pattern of ownership of such associations is different from banks. As a result, they can afford to offer better interest to depositors and lower interest rate to borrowers, in comparison to commercial banks.
Internet banks are proving to be of great help to consumers. Since the banks do not have any physical offices or branches, their overhand expenses are low. Consequently, they offer loans at very competitive prices, while paying attractive interest to depositors.