Credit unions generally have fewer branches, and they may be limited to an area.
TD, CIBC, RBC, Scotiabank and BMO) have branches all over the country. Limited Locations: The Big Five Banks (i.e.
That said, not all credit unions offer all the basic services you may be looking for.Ģ. For example, many of them now offer wealth management services using robo-advisors and online trading for self-directed investors. Fewer Financial Products: Many credit unions have expanded their financial service offerings in recent times by partnering with other service providers. You will find many of them championing efforts that promote sustainability, fight poverty and help under-represented minorities. Community Development: Credit unions support projects within their local community, which indirectly support their members. It’s no wonder that as of 2022, Canada’s credit unions have received the top honours in the Ipsos Financial Service Excellence Awards for Customer service for 18 years in a row.ĥ. Customer Service: Credit unions excel at providing personalized, face-to-face customer service that beats their competition. Credit unions offer personal loans, mortgages and credit at competitive rates.Ĥ. Better Rates: As I mentioned earlier, I initially became a credit union member because they offered me a lower mortgage rate.
Unions in small vs big business pro#
Pro Hint: Always do your research before signing up with a credit union and don’t just assume that credit unions always have lower fees.ģ. Having said that, during my in-depth research into 15 or so Canadian credit unions, I observed that some of them actually had fees that rivalled traditional banks. Members usually have access to no-fee chequing accounts and no-minimum balance banking. Lower Fees: Their account maintenance and service fees are lower and fewer compared to the big banks. EQ Bank).Īlso, credit unions may pay interest on your chequing account balance.Ģ. Higher Interest Rates: The interest rates paid on savings and other deposits are generally higher than big banks, although they may not be as competitive as the rates offered by online-only banks (e.g. There are advantages and disadvantages to becoming a member of a credit union. That being said, a credit union must also turn over some profit for it to stay solvent and meet basic regulatory capital adequacy requirements. Credit unions use a not-for-profit model and are owned by their customers (members), while banks are profit-driven organizations tasked with maximizing returns for their shareholders.Ĭredit unions focus on providing their members with financial services at an affordable fee and often give away a part of their annual profit to fund local community projects and development. We can find the major difference between a credit union and a bank in how they are modelled. This was my introduction to the world of credit unions. At the time, they were offering a rate that was 50 basis points (0.50%) better than what my bank was willing to offer me… and with very similar terms and conditions. My first interaction with a credit union occurred after a friend referred me to a local credit union in my area during my search for a competitive mortgage rate. The first credit union in North America (also referred to as Caisse Populaires or People’s Bank) emerged in Quebec in 1900, where it was founded by a journalist, Alphonse Desjardins.Īs per the Canadian Credit Union Association, there are 231 credit unions in Canada that serve over 5.9 million members.Īnd the Desjardins Group includes 219 Caisse Populaires, mostly located in Quebec and Ontario, who serve almost 5 million members.Ībout one in five Canadians belong to a credit union.
All members have a stake in the Co-operative, share in the profits, and vote for the Board of Directors.Ĭredit unions can trace their roots back to 1852 in Germany. Should I Join a Credit Union? Credit Unions in CanadaĬredit unions are financial cooperatives that are owned by their members.
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