The number of people on my “financially savvy” list is quite small. In fact, I could count on one hand the people I consider truly great with handling their finances, debt and investments. My father-in-law holds the esteem of being at the very top.
He has held many investments, from the stock market to real estate. He plans house renovations with the resale value in mind. He charges interest on loans to family members, however miniscule; to justify the interest he would have gained from an investment. He has cash, GIC’s and term deposits with a couple different banks. He also has a long-standing relationship with a credit union, and it is that credit union which holds the majority of his capital.
Credit Unions have been a staple of the Canadian financial system for over 100 years. In fact, it was French-Canadian immigrants who took the credit union tradition to the United States. Credit unions offer much of the same financial services as traditional banks, but they promote frugal living, wise credit choices and overall financial health.
How do they do this? Simple, credit unions do not have customers, they have members. When you join a credit union, you buy a share in the company. A credit union’s top priority is to serve its members.
- Credit Unions offer competitive and often lower interest rates on mortgages, credit cards, loans and other credit products in comparison to traditional banks.
- Credit Unions offer higher savings and investment rates than most traditional banks.
- A board of directors that is elected by members manage Credit Unions.
- Credit Unions offer a share of the profits to members. The share or shares you bought to join result in dividends as the company prospers.
- Credit unions make decisions about interest rates and such, based on what is the most beneficial to their members. The primary focus is not producing a large profit, but instead offering better services and financial stability to the members of the credit union.
In my experience, credit unions also excel in customer service. I must confess, I have not travelled across Canada and dropped in to visit every credit union on the map; however, stories of a member being treated poorly by credit union staff are rare. Hey, the fact is, every member of the credit union is contributing to the employee’s paycheques. More often than not, a real live person answers the phone. I can drop in and ask a question about mortgages without making an appointment. In fact, my husband spent over an hour discussing loans and mortgages at our credit union, without being rushed, pressured to make an appointment or advised to come to back later.
The downside to credit unions: the branches are not as widespread as large banks. Not quite as many locations, not quite as many bank machines, not always close to home. I drive about thirty minutes to get to my credit union, but it is worth it. I am not one to put all my eggs in one basket, so I have a couple traditional bank accounts, an online bank account and a credit union account. The majority of my savings and investments I keep at the credit union, simply because they offer the best deal on interest. I always comparison shop, and the credit union offers me 1.5% higher interest than the highest offer from the banks. That money is talking loud and clear.
I cannot think of anyone who would not benefit from a credit union. I am certainly not saying it should be your only financial institution, but a little diversification is good for everybody. Credit unions offer CDIC insurance, and tend to protect themselves more stringently against losses, so they are not as vulnerable to market changes.
If you are looking for great products, great rates and great service, look for your nearest credit union. Once you join, go ahead and have fun telling people you’re one of the owners.