Why choose a credit union instead of a bank?

Did you know that one in three Canadian adults is a member of a credit union or caisse populaire? While Canada’s big banks may be the loudest financial service providers in Canada, credit unions are quietly providing millions of Canadians with a very different, more impactful banking experience.

As our members know, there are many, many benefits to belonging to a co-operative, including a financial co-operative like ACU. Chances are, if you’re a member, you’ve been asked this question: What’s the difference between banks and credit unions?

Well, all the differences and advantages ultimately spring from the difference in ownership structure.

What is the difference between banks and credit unions?

Credit unions are owned by the people who use their services. Banks are not.

Each and every credit union member is an owner, which is what makes them co-operatives.

As owners and shareholders of democratic co-operatives, every member has a voice. Each member is an equal shareholder in the company, no matter how big or small their account balance. Members vote on matters that come before the membership from time to time, such as merger votes, which may also take place at the credit union’s annual general meeting. Members can therefore influence how the credit union is run and make suggestions for improving how it operates. They vote for board members to represent them and can be elected to the board themselves. You wouldn’t get this level of influence at a bank without owning a lot of stock.

Employees are member-owners as well, so they have a common interest with other members in the well-being of the credit union. Further, decision-makers and executives live in the same communities as the members do, which may not be the case with many banks.

The key advantages of Canadian credit unions vs. banks

Credit union profits are used to serve the member-owners. Bank profits go to investors who own bank stock, whether they’re customers or not.

Profits are reinvested in the credit union to enhance products, services and delivery for all members and offer very competitive interest rates and lower service fees. One way or another, members reap the benefits of the credit union’s success. The same cannot be said for bank customers.

Traditional Canadian banks make a lot of money for their investors. They are big corporate entities whose main goal is to maximize profits for their shareholders.

Credit unions, meanwhile, maximize value for members. They’re not under pressure from shareholders to make huge profits off of customers, because the owners and customers (members) are the same people! Rather, they use their financial strength to deliver better value to member-owners.

Credit unions offer many of the same benefits as banks

In terms of the services they provide, banks and credit unions are very similar. Both offer a wide range of traditional and innovative banking services to individuals, organizations, and large and small businesses in the form of everyday financial services, loans, investments and advice.

Both are highly regulated: credit unions provincially, for the most part, and banks federally. Members and customers both enjoy deposit protection. In Manitoba, all member deposits are guaranteed without limit by the Deposit Guarantee Corporation of Manitoba, while the banks’ deposit protection is not unlimited.

Credit unions are big supporters of their communities

Credit unions, including ACU, adhere to the Seven International Co-operative Principles, of which Concern for Community is one. Supporting the communities we operate in is a major priority and we do this in a wide variety of ways.

At ACU, we believe that business should be a force for good. Our “values in action” talks about our commitment and impact within the community.

These values run through all areas of the business, including purchasing, employment supports, responsible investments, social impact finance, community response campaigns, financial access programs and affordable housing initiatives.

ACU’s values also extend through reconciliation, climate resilience, and special products like the Halal Mortgage — which recognizes Islam’s position on paying interest — and programs like Recognition Counts, which helps recent immigrants become accredited in the professions they practiced in their former countries.

Get started with ACU

If you’re not among the 140,000 Manitobans who already belong to ACU, it’s easy to become a member. Whether you’re an individual, a business, are moving from another financial institution or are in need of assistance with identification and the application process, we’re here to help.

To start enjoying the benefits of banking with a credit union, please visit our website, book an appointment, or call 204.958.8588.