Banks vs Credit Unions...what's the difference?

For this next blog I am going to explain a few differences between credit unions and banks.  Just in case you don't know- and a review for if you do!  It's fairly easy to assume that since both institutions deal with money they should be called "banks", however there are some big differences.

1.Credit unions are not like banks. Credit unions do not have customers or clients, not in the sense that a bank would have customers or clients. Credit unions have members, which own shares in the credit union, and are, essentially, the owners of the credit union.

2. Credit unions are formed based on a bond of association. Usually, this bond of association is a commonality that joins people by employment, membership in an organisation such as labour union, or just the mere fact that people live in a particular community.

3. There are many reasons for choosing a credit union for your financial needs as opposed to a bank. Some of these reasons include:
 -the fact that credit unions generally offer a better interest rate on deposits, and charge a lesser interest rate on loans than do other financial institutions.
-Credit unions also charge fewer service fees and provide more free services than a conventional bank or trust company. (who wouldn't want better service fees and free services?)

4. Credit unions, like other financial institutions, are closely regulated. All deposits, including interest, are guaranteed without limit by the Deposit Guarantee Corporation of Manitoba.

5. Credit unions try provide many services. In addition to traditional financial services, members can also access various types of investment, insurance and trust services either directly or indirectly, through one of many financial service co-operative affiliates. Here are some of the services available to members at credit unions:

• savings and chequing accounts
• term deposits
• investment and retirement planning
• personal, business and agricultural loans
• lines of credit
• mortgages
• Credit Union MasterCard credit cards
• MEMBER CARD® debit cards for INTERAC† Direct Payment & ATM transactions
• insurance
• trust services
• brokerage services

6. I found that they adhere to the Seven International Co-operative Principles that are listed below:
1st Principle: Voluntary and Open Membership
2nd Principle: Democratic Member Control
3rd Principle: Member Economic Participation
4th Principle: Autonomy and Independence
5th Principle: Education, Training and Information
6th Principle: Co-operation among Co-operatives
7th Principle: Concern for Community

Overall, I would say that becoming a credit union member will provide you with many options and alternatives to suit your financial needs. If you need more information, check out Manitoba's Credit Unions site at  http://www.creditunion.mb.ca/about/index.htm !