WTF Is a Credit Union? All Your Questions, Answered.
WTF Is a Credit Union? All Your Questions, Answered.
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01.27.2022 - By: Anastasia Barbuzzi
Have you ever passed by a credit union on the way to your local bank branch and thought, what is it and why would people go there? I know I have, and that’s why I decided to air an episode focused on credit unions in the first place.
Go ahead, chalk it up to a lack of financial literacy if you want! Or… trust that I’m not the only person out there who had zero ideas about what a credit union is, how it operates, and how it can work to my benefit. That is, until I took a deep dive into the subject and met Jessica Thiessen, the ever-friendly guest on a recent podcast episode entitled, WTF Is a Credit Union?
Jessica speaks on behalf of Canada's Credit Unions and takes you through a 101-style lesson on…
What credit unions are
How they operate
How they work to your benefit
For example, did you know that credit union members own their credit unions? Now you do!
Plus, Jessica offers some helpful budgeting and planning tips to help guide you through the rest of 2022 and beyond. So if you're curious about credit unions, looking for different ways to manage your finances, or need some advice on how to start the New Year off on a good foot, make sure you listen to the episode. BUT! If you want some quick answers to your burning questions, keep reading this post.
In the next few sections, you’ll find answers to some of the most common questions about credit unions. All of these questions were answered during my chat with Jessica as well, so keep in mind that this post is expertly advised.
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What is a credit union and how does it work?
According to Canada’s Credit Unions, credit unions are “well-regulated, full-service financial institutions and offer a wide breadth of banking products, including chequing and savings accounts, lines of credit, loans, mortgages and more”. Basically, credit unions offer everything that banks do — plus a little extra.
Credit unions are a type of financial institution owned and controlled by the people who bank with them. Meaning… you have more of a say in how your bank is run. And since credit unions work hard to benefit you, it means their customer service is polished. In fact, credit unions have won awards for their top-notch customer service.
What is bad about a credit union?
In Jessica’s opinion, nothing really! The answer to this question is a bit subjective. It all depends on how you view credit unions and whether or not they work to your benefit, maybe your community’s too.
Can anyone join a credit union?
Turns out, the only requirement for provincially regulated credit unions is that you live in the province in which they operate. Membership in federally regulated credit unions is open to all Canadian residents. Your eligibility depends on your geographic location and not much else. There are some other exceptions though, including…
Occupation bond credit unions which are for employees of a specific company or industry and membership is generally extended to family members of employees (only accounts for 5% of credit unions in Canada)
Ethnic bond credit unions which are for people of certain ethnic roots or heritage (only accounts for 1% of credit union in Canada).
Over 5.9 million Canadians use a credit union (approximately 16% of the population), and that number is increasing.
Some recent stats concerning the impact that Canada’s credit unions have on their communities.
What are the 5 largest Canadian credit unions?
Every year the Canadian Credit Union Association publishes a list of the largest Canadian credit unions. In 2021, these were the 5 biggest credit unions in Canada:
Is your money safer in a credit union or a bank?
To be honest, your money is safe in both places. Canada’s Credit Unions says that “when you bank with a credit union, you can rest assured that your money is safe and secure”.
It doesn’t stop there though — credit unions (in Canada) are either provincially or federally regulated, and all deposits are well insured. In some cases, deposit insurance coverage is higher than the big five banks.
Have more questions? Let us know in the comments below!
To learn more about credit unions and Canada's Credit Unions in particular, tap or click here.
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