Do you bank with a credit union? You may not have given it much thought other than it was a banking institution in your neighbourhood with good parking and friendly staff. While a credit union and a standard bank may seem the same with similar offerings, they are different, and it is worth understanding the distinctions.
While a bank is a for-profit company, publicly and privately, a credit union is a nonprofit institution. Credit unions are owned by their members, set up as a cooperative, and are often for people with common bonds like employment industries or organizational memberships. Some also receive subsidies and tax exemptions, so they don’t need to worry about making shareholder profits. Banks are focused on making profits and, in turn, have higher fees with lower returns on savings products.
Now that you know the main differences between a bank and a credit union, are all credit unions the same? No, they aren’t. Let’s go over the types of credit unions there.
Canadian Credit Unions
In Canada, there are 231 credit unions with almost 6 million members. From Ontario credit unions to Alberta credit unions, they are found nationwide. They are federally or provincially regulated to meet standards to be sound financial institutions. Some of these include:
- British Columbia: Vancity, Coast Capital First Western
- Alberta: Vision, Servus, Connect First
- Saskatchewan: Affinity, Conexus, Innovation
- Manitoba: Cambrian, Assiniboine, Steinbach
- Ontario: ECU, Alterna, Meridian, Desjardins Ontario credit union
- New Brunswick: Bayview, UNI Financial Cooperation
- Nova Scotia: Credit Union Atlantic, East Coast
- Newfoundland & Labrador: Newfoundland and Labrador credit union
- PEI: Provincial credit union
Federal Credit Unions
- Coast Capital Saving
- Caisse Populaire Acadienne Itee (UNI Financial Cooperation)
American Credit Unions
Many credit unions in the states have similar offerings but can differ on who is eligible to become a member. Here are some of the types of credit unions.
Type #1: Community Credit Unions
These credit unions are open to the general public in their local communities. Some of these local branches also support charities and initiatives within the area, including economic development and improving housing, food banks and other nonprofits.
Type #2: Federal and Provincial Credit Unions
Federal chartered credit unions are supervised and regulated by the national credit union association and have an insurance fund for all federal deposits. State-chartered credit unions have a state supervisory authority that regulates them and can be federally or privately insured.
Type #3: Military Credit Unions
A military credit union puts locations near bases to take care of the financial needs of those in the armed forces. They offer the usual financial products but also specialize in handling military situations, cater to their specific demographic with initiatives around deployment and use federal programs like VA Lons to offer faster processing for their members.
Additionally, military credit unions offer lower interest rates for service personnel because of their unique circumstances.
Type #4: College Credit Unions
Different educational institutions have credit unions available to staff, faculty and students, with locations on campus. This makes it more easily accessible, and they offer a simple way for young adults to get membership, with lower borrowing costs for tuition and expenses.
These memberships also extend past graduation, with alumni being able to take advantage of the benefits later in life.
Benefits of Credit Unions
Credit unions truly are there for the people and offer benefits like:
- Higher interest rates for savings accounts
- Better rates for mortgages
- Lower fees for various financial products
- Better customer service with a personal, one-on-one experience
- Community support for local initiatives and charities that help their membership
- Active participation as a right to vote for the board of directors as well as giving feedback for changes and improvements.
They have fewer locations than other banks but focus their branches in key areas and utilize the network of cooperative unions nationwide.
The cooperative work through voluntary and open membership and member control through independence. Along with this autonomy, they cooperate with other credit unions and have a genuine concern and spirit in the local communities where they reside and conduct business.
How to Join a Credit Union
Joining a credit union requires the following:
- Age of majority
- Resident of the province/state/country
- Willingness to buy an equity share
- seven years since declaring bankruptcy
- Some credit unions require armed forces, industry, or trade affiliation.
Credit unions offer much of the same financial products as regular banks, including:
- Credit cards
- Loans
- Chequing accounts
- Savings accounts
- Mortgages
- Mutual funds
- ATMs
- Online banking
Ultimately, credit unions are located worldwide in over 118 countries, providing local support with a global reach. Deciding which type of credit union is best depends on affiliation with specific industries and location within your community. Consider joining a credit union and conducting your banking and financial needs within their open walls. You will find a welcoming spirit that feels like home.