![]() ![]() They can help anyone Canada-wide, from the Yukon to Prince Edward Island and anywhere in-between. What is a bank?īanks, alternatively, serve customers instead of members. A community might exist around a geographic location, an employer, a place of worship, or even a school. Credit unions are unlikely to provide guidance or products to anyone that doesn’t belong directly to the community they serve. This means that they’re owned and run by members-the people who deposit their money into them. What is a credit union?Ĭredit unions are similar to banks in that they provide all the same services you’d expect from banks, but only credit union members can access them.Ĭredit unions by definition are financial co-operatives. Now that you have a general overview of what the two institutions do, let’s dive into the nitty-gritty details that separate them. In 2017, the Canadian federal government asked all credit unions to remove references to “bank,” “banking,” and “banker” from their websites and advertisements. It’s important to note that a credit union can’t call itself a bank. Credit unions return the profits they earn to their members through profit-sharing, lower fees, community investments, and surcharge-free ATMs. That’s why credit unions are not listed on stock exchanges. You have to buy a share before you can access the credit union’s services. The main difference between credit unions and banks in Canada is that banks are for-profit organizations while credit unions are not-for-profit.Īs for-profit institutions, banks earn money for their shareholders and investors-people who buy part of the company and get to make money from its profits.Ĭredit unions want to earn money for their shareholders, too, but with one big difference: Only members-the correct term for credit union customers-can own shares. What’s the difference between a bank and a credit union? They’re both dedicated to helping Canadians with important financial needs, such as chequing and savings accounts, investments, credit cards, mortgages, and more. By comparison, RBC (Royal Bank of Canada) is one of Canada’s Big Five banks and has about 17 million clients.īut life as we know it today wouldn’t be possible without credit unions and banks. In 2021, only about six million Canadians used credit unions for personal banking. It’s not surprising that most kids-and more than a few adults-aren’t familiar with the difference between the two types of financial institutions. Banks are insured by the Canada Deposit Insurance Corporation (CDIC).Credit unions follow the laws in the Credit Unions Act and are insured by the provinces. Banks and credit unions offer many of the same services, but banks are more likely to offer a broader range of services and products.The main difference between a credit union and a bank is that a credit union is non-profit, while a bank is a for-profit financial institution.Banks have customers instead of members.Often members have to live in a specific region or be a member of a certain community. Credit unions by definition are financial co-operatives.Both banks and credit unions are dedicated to helping people with their financial needs. ![]()
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