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Bank accounts offered by credit unions
Get a say in how your financial institution works.
Wondering about credit unions? They’re smaller than the big traditional banks and run by members instead of shareholders, so you get more say in how they operate. But smaller institutions could mean fewer branches and ATMs. Check out our guide on credit unions and find out what to look for — and avoid — when exploring accounts.
What is a credit union?
A credit union is a nonprofit financial institution that generally offers the same products as traditional banks. Each credit union member owns a share in the organization they belong to, and each has a vote in how the credit union is managed or governed.
While banks pass any profits on to their external shareholders, a credit union’s profits are put back into the products and services they offer. This aims to let members enjoy their share of profits through better customer service, lower mortgage interest rates, fewer fees and better banking products.
Originally, credit unions were created by various industries to give their workers access to banking products without having to pay high rates and fees. For this reason, many credit unions today still only cater to certain groups, such as teachers unions or religious groups. However, many have been able to expand their membership to the general public.
How do I compare credit union bank accounts?
Make sure you keep the following features in mind when weighing up the pros and cons of different credit union bank accounts:
Start by checking what fees and charges will apply to your account. These include monthly fees, annual fees, overdraft fees, bill pay fees, foreign transaction fees and anything else you can be charged. Read the fine print closely to familiarize yourself with all penalties that may apply, and check to see if any of the fees can be waived if you meet certain conditions, like a minimum balance requirement.
Compare the options you have for accessing your funds: Can you manage your money online, from an app, over the phone and/or by popping into a branch? If you ever need fast access to your funds in an emergency, can you withdraw money from your account without incurring any fees? If you regularly use ATMs, how large is the credit union’s ATM network?
Internet and mobile banking portals
In our modern world, more and more of our everyday banking transactions are carried out online or via your smartphone. With this in mind, read reviews and testimonials to find out how user-friendly the credit union’s Internet banking portal and mobile app are.
Questions to ask when choosing a credit union
If you’re thinking about joining a credit union, consider the following factors when making your decision:
- Does the credit union have a branch close to you?
- Does it offer the accounts, credit cards and services you require?
- Does it charge high fees on its products?
- How long has it been established? Does it have a good reputation?
- Does it offer online banking? If so, is it easy to use?
- Can it offer prompt and friendly customer support whenever you need help?
- Is it chartered at the provincial or federal level?
- Do you qualify for an account?
What are the benefits of credit union bank accounts?
- Lower fees. Since credit unions are nonprofit institutions, fees for services and accounts are often lower than banks.
- Competitive rates. Many credit unions offer interest rates that compare to or beat traditional banks.
- Personalized experience. Credit unions are much smaller than most banks, allowing them to offer a more personal approach to banking.
- Voting rights. Credit union members get a say in how the institution is run and can vote on important decisions like appointing new board members.
- Peace of mind. Because a credit union is a nonprofit, it can’t put potential profits above the wellbeing of its members.
- Safe banking options. According to the CDIC, each of Canada’s 10 provinces has a provincial deposit insurer that protects provincial credit unions.
What are the risks of a credit union?
Things to watch out for while comparing a credit union to a bank include:
- Limited presence. Due to its smaller size, you might find that the credit union you choose doesn’t have a large presence in Canada. This can make it hard to find a branch or in-network ATM while traveling.
- Membership fees. Most credit unions require you to pay a membership fee or make a donation in order to join.
- Less tech-savvy. Smaller credit unions may not have the resources to invest in expensive technology like mobile banking apps, though most will have at least some online presence.
The biggest credit unions in Canada
Here are the top 10 largest credit unions in Canada by assets as of Q4 of 2019:
- Vancity — $23.2 billion
- Meridian Credit Union Limited — $21 billion
- Coast Capital Savings Federal Credit Union— $20.2 billion
- Servus Credit Union — $16.3 billion
- First West Credit Union — $11 billion
- Steinbach Credit Union Limited — $6.9 billion
- Conexus Credit Union — $6.5 billion
- Alterna Savings and Credit Union Limited — $6.1 billion
- Affinity Credit Union — $6 billion
- Connect First Credit Union Ltd — $5.8 billion
Credit unions offer all the features you’d expect from an ordinary bank, but often with fewer fees and better features. Compare traditional chequing accounts and credit union accounts to find the option that’s the best fit for you.
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