If you’ve ever had a conversation with your friends and family about which bank they use, there’s a chance you haven’t heard the term “credit union.” Canadians have several financial institutions to choose from. For most people, where they bank is a decision that was made for them by their parents and continues out of convenience, but did you know there are other options out there to explore?
Credit unions are a type of financial institution owned and controlled by the people who bank with them. When you bank with a credit union, you are a member and an owner, not just a number. Over 5.9 million Canadians use a credit union for their day-to-day banking needs (approximately 16% of the population), and that number is increasing daily. So how do credit unions and banks compare?
Credit Unions vs Banks: What’s the real difference?
Canada’s credit unions are well-regulated, full-service financial institutions and offer a wide breadth of banking products, including chequing and savings accounts, lines of credit, loans, mortgages and more. There are more than 200 credit unions that operate in communities across Canada (outside of Quebec) and they can be found in large urban centres and rural areas. In fact, there are 394 communities across the country where a credit union is the only brick and mortar financial institution available. The most significant difference between credit unions and chartered banks lies in the fact that credit unions are financial cooperatives guided by the seven cooperative principles.
Here are just a few examples of the benefits of banking with a credit union and what makes them different from other financial institutions:
The Benefits of Credit Unions
If you’re looking to start investing in your future, many credit unions often promise better savings rates for their members.
You’re more than just a number
CBanking with a credit union means you are a member and an owner. Opening an account with a credit union requires the purchase of a membership share and while the cost varies among credit unions, these fees can be as low as $1 and are fully refundable if you ever choose to close your account.
This unique distinction means that you are a member and an owner, and therefore, you have a say in how the credit union is run. At a credit union, the board of directors is elected from the membership base on the premise of “one member, one vote.” It doesn’t matter how much money you have invested in the credit union because all members have an equal say. By contrast, most banks operate through a typical publicly traded company structure wherein the Board of Directors is nominated and elected by shareholders. These shareholders usually hold one vote for each share they own. This means that larger shareholders can have more significant influence over the company. At a credit union, the shareholders are the members.
Community over everything
Credit unions put the communities in which they serve at the forefront. At the core of every credit union is the desire to make a positive impact. Credit unions promote financial literacy, support homeownership, provide access to funding and financial rewards and more. Learn more about credit unions and how they are helping communities here.
Safe and secure
When you bank with a credit union, you can rest assured that your money is safe and secure. Credit unions are well-regulated, and for non-registered deposits, they have deposit insurance protection levels – in some cases -even more robust than the big five banks.
We know the meaning of great customer service
We pride ourselves on delivering exceptional customer service, which is why credit unions have won the 2021 Ipsos Customer Service Excellence Award for 17 years in a row. Because most credit unions operate locally, the member experience can be much more personalized. There are many situations where you may be interacting directly with the decision-maker for the loan you are applying for, whereas large banks adopt hierarchical structures and may not put the same level of effort into each customer relationship.
Credit Unions for the long run
As financial institutions, credit unions can offer exceptional service standards, attractive pricing on credit, and several other benefits to their members and their communities. Banking with a credit union can cover many or all of your banking, investing and financing needs — all while ensuring you’re put first.
How to decide if joining a credit union is right for you
Do you still have questions? We’re here to help! Click the link below to find a credit union in your community. Our award-winning customer service helps our members feel more comfortable with all financial decisions.