Where do you bank? Friends and family may have asked you this question before, and some of you will answer, “X Credit Union.” If you deal with a credit union or wonder whether you should, here are some things to consider.
What Is a Credit Union?
Investopedia defines a credit union as “a type of financial cooperative that provides traditional banking services…Credit unions are created, owned, and operated by their participants. As such, they are not-for-profit enterprises that enjoy tax-exempt status.” In other words, when you become a credit union member, you are now a part-owner of the credit union. You’ll purchase a share (usually about $5), allowing you to use the credit union’s financial services and vote on the board of directors.
Bank vs. Credit Union – What’s the Difference?
One difference between a bank and a credit union is that a bank is a for-profit organization, and a credit union is a not-for-profit organization. Credit unions are member-owned and focus on giving back to their community. For example, TCU Place in Saskatoon is sponsored by TCU Financial Group, and Conexus Credit Union sponsors the Conexus Art Center. Because most credit unions are provincial, they have a more considerable impact on local communities and businesses than banks. In short, by dealing at a credit union, you’re helping to support local.
Services and Fees
Most credit unions offer the same services you would find at a bank, like basic banking accounts (most offering some form of free chequing account), lending, commercial services, wealth management, estate planning, etc. These services may even be better suited for you than a bank because credit unions follow provincial legislation, meaning some of their requirements will be different and possibly less stringent than a bank. Credit unions will have varying fees, but they will be comparable to bank fees or better.
Dealing with a credit union means supporting your local economy instead of filling the pockets of investors. You’ll get the same products and services as you would get at a bank and most likely will have fewer fees to pay. If this sounds like something that resonates with you, I highly recommend joining a credit union and seeing the difference for yourself!
