A credit union differs from a traditional bank in a few key ways that can really benefit you as a saver and borrower. If you want a more personalized banking experience and better rates on your financial products, a credit union might be exactly what you’re looking for.
What is a credit union?
A credit union is a not-for-profit financial institution focused on providing the best banking experience to members. They are community-focused, with an aim to offer the best financial products to members rather than earn the highest return possible. This is unlike traditional banks, which are for-profit institutions focused on earning the highest return from fees and interest rates from clients, and then reinvesting for more profit for the bank. As a result, you can often get higher interest rates on your savings and lower interest rates on your borrowing from a credit union than a bank. This makes credit unions an appealing banking choice for anyone that’s money-savvy!
Credit unions are a compelling choice for all Albertans in any stage of life who are looking for a banking alternative that offers unique benefits and a business model focused on what’s best for them. Whether you’re a new grad getting your finances organized for the first time, a young family trying to save for your future, or nearing the end of your career and planning for retirement, a credit union has what you need for your personal banking.
How is a credit union similar to a traditional bank?
Credit unions are an alternative banking choice, but that doesn’t mean they don’t offer many of the same things a traditional bank does. Here are a few of the familiar products and features you’ll enjoy banking with a credit union:
Day-to-day banking, savings accounts, borrowing, and more!
Credit unions are financial institutions that offer many of the same banking products you can find at other institutions such as chequing accounts, savings accounts, GICs, loans, mortgages, and lines of credit. However, their business model often lets them offer better terms and rates to members than many of the big banks do.
Registered accounts like the TFSA, RRSP, and RESP
Most credit unions offer registered accounts like the Tax-Free Savings Account (TFSA), Registered Retirement Savings Plan (RRSP), and Registered Education Savings Plan (RESP). You can capture all the tax-advantages of these accounts, while still enjoying all the perks of banking with a credit union.
Online banking
With Alberta credit unions, you can access your money anywhere, anytime. Alberta credit unions offer online and mobile banking options so you can easily pay bills, transfer funds and check your investments no matter where you are.
ATM access
With an ATM network bigger than most banks, credit union members have access to thousands of surcharge-free ATMs. You’ll be able to access your money when and where you need it.
How is banking different with a credit union?
While credit unions offer many of the same products and services you get with a traditional bank, there are some differences.
Profit-sharing
Credit unions share profits back with members in the form of annual returns. When you bank with credit unions, you make money while you save money, whether you are making investments or not. As a credit union member, you’ll get a share in the profit the credit union earns. This usually comes annually as a direct deposit or a cheque from the credit union directly to you. The greater your financial assets and the more financial products you have with your credit union, the higher your share in the annual profits is likely to be.
Deposit insurance
Credit unions are subject to a deposit insurance regime that offers a 100% guaranteed through the Alberta Credit Union Deposit Guarantee Corporation. That means the money you put in and the interest you earn is safe and secure up to any dollar amount without limits or restrictions. This is similar to the coverage offered by CDIC at traditional banks, so you don’t have to worry about your money at a credit union! All your deposits are insured so you can rest easy knowing your money is safe.
About Alberta Central
Alberta Central is an industry association whose purpose is to champion change for Alberta’s credit union system and bring value and expertise to its members. Through innovative products and services, thought leadership and by advocating on priority issues, Alberta Central helps advance the collective voice of the credit union system with key stakeholders, including government.
Credit Unions of Alberta works to increase awareness of the credit union difference with the public. To learn more or find a credit union to do your banking with, check out the Credit Union Central of Alberta website.
Credit Unions meet you in real life.
Alberta’s credit unions make banking work for you, wherever life takes you. When you bank with credit unions in Alberta, you are banking with real people in real communities who care about your real goals — and will help you meet them!
This post was sponsored by Credit Unions of Alberta but all views and opinions expressed herein are my own.
