What is a credit union?
A credit union is a financial institution owned by its own members, not shareholders (like a bank). Credit unions are nonprofit; their primary goal is to serve their members, rather than spending all their time and effort earning a profit. As a result, many credit unions offer better benefits – like lower interest on loans and mortgages, better interest on savings, and reduced fees.
So why don’t more people use credit unions? Well, even though credit unions have been around for a really long time, a lot of people are confused about what they are and how they work. So let’s clear some things up by breaking down 7 common myths about credit unions.
Myth 1: Your money isn’t as safe at a credit union
Fact: Your money is just as safe at a credit union as it would be at a bank. Like banks, credit unions work with regulatory authorities to insure your money. At Meridian, all eligible deposits in registered accounts have unlimited coverage through the Financial Services Regulatory Authority (FSRA). Eligible deposits (not in registered accounts) are insured up to $250,000 through the Financial Services Regulatory Authority (FSRA).
Myth 2: Credit unions offer fewer services than banks
Fact: Credit unions offer all the same services and products that banks do. From chequing and savings accounts, loans and mortgages, investment options, personalized financial plans, and more. In fact, a credit union may come with extra perks! For example, Meridian’s rates are often better than the big Canadian banks, and we offer innovative services designed to help our Members.
Myth 3: You have to pay membership fees at a credit union
Fact: Nope – no membership fees! When you first join a credit union, you put down a small, one-time deposit (at Meridian it’s a dollar), but it’s not a fee. This dollar actually buys you a share in the credit union, making you an owner. This is different from banks, which are owned by investors.
That’s why we call our account holders “Members” instead of “customers” or “clients” – because it’s a better representation of our relationship with the people we serve. We’re a community, and when we make decisions about how to spend our time and money, we do it with our Members (owners) in mind.
Myth 4: It’s harder to access your money when you bank with a credit union
Fact: Credit unions are part of national ABM networks, so there’s almost always an access point nearby. Meridian Members have access to over 43,000 surcharge-free ABMs in North America with THE EXCHANGE® Network and the Allpoint Network in the US. Find an ABM.
Myth 5: Credit unions aren’t as high-tech as banks
Fact: The beauty of technology these days is that it’s becoming more and more accessible. You don’t need to have the resources of a big bank to offer the same level of digital banking. Credit unions like Meridian offer convenient, easy-to-use online banking and mobile apps that help you manage your everyday finances as well as any bank’s options. In fact, Meridian was actually the first financial institution in Canada to offer mobile cheque deposit.
Myth 6: Credit unions have strict eligibility requirements
Fact: Anyone can join a credit union. Opening any account and making a $1 deposit is enough to make you a Meridian Member.
There are some credit unions that originate from specific employers or communities, so we understand why this myth is so common. It’s an outdated perception now, though. These days, almost all mid-size to large credit unions (Meridian is the biggest credit union in Ontario, FYI) will accept any member.
Myth 7: A credit union isn’t right for you
Fact: Credit unions are right for everyone! No matter where you live, how old you are, or how much money you have, a credit union like Meridian is perfect for you. Interested in talking more about all your options? Reach out to us!