Many Canadians see or hear about credit unions daily, but it’s a passing thought for many. You may be satisfied with your bank, the fees they charge, and the interest you’re paying, and you believe there are no more favourable terms out there. In a lot of cases, you’re wrong. Moving your money to a credit union and becoming a member, you receive access to better interest rates and more advantageous conditions that ensure you receive maximum growth for your money.
A credit union is a full-service financial institution. They offer day-to-day banking just like a bank and have several benefits. A credit union, however, is not-for-profit. They are member-owned and run, with a board democratically nominated by members. As one has to join and become a member, members can often negotiate better terms for accounts, loans, and more.
Here is where to start on how to join a credit union.
Why Become a Credit Union Member
At a bank, you’re a client. At a credit union, you’re a member. You don’t open an account. You open a membership. You become a member by buying a set of shares, which gives you a part of the ownership of the credit union alongside other members.
These shares are typically very inexpensive, and you may be required to buy a certain amount to become a fully-fledged member. This all amounts to a credit union being more community-centered rather than profit-hungry. To be brief about it, it’s people helping people.
You cannot join a credit union without buying shares. It is required. This is what the philosophy of credit unions is built from, creating member-owners to self-run branches and self-manage the organization’s operations in the community.
Credit Union Membership Requirements
Credit unions may target specific subsets of the population. Low-income credit unions target low-income members, community development credit unions target businesses, and more. Credit unions may require you to have a certain profession, such as being a military member or teacher.
Also, you may need to be associated with a particular association such as a church or labour union, have a specific education background, such as having graduated from a specific institution, or to be living within a certain community or area.
Credit Union Membership Benefits
Regardless of your income, credit rating, or how much money you have stored at a credit union, as a member, you have equal power as any other member. You get to vote for the board of directors and how the credit union is run.
As a member, you get access to a credit union’s services, often delivered at better rates and under superior terms than what you will find at a bank. You can also consult with other members and representatives on issues relating to financial advice, investing, and more.
Credit Union Eligibility
Credit unions are provincially regulated. Unless otherwise dictated by the institution, there is no standard rule regarding who can become a member. The only thing is that smaller credit unions operating locally may want some proof of residence and evidence that you live in the community. That said, there are also large nationwide credit unions that have no local requirement and that will accept member applications from anyone living or working in Canada.
More than 5.7 million Canadians’ primary financial partner is not a bank but a credit union. There are hundreds across the country. Be sure to research the credit unions accessible to you. Select the right institution based on their services, such as savings and chequing accounts, credit cards, loans and mortgages, and investing.
Credit Union Application
Not all credit unions are the same. While most prefer a new member to apply in person, some offer the option to submit an application online through a website or do it over the phone with a credit union representative.
To apply to be a credit union member, you must submit your Social Insurance Number and provide some form of photo identification. This may or may not be a driver’s license, passport, provincial identification card, or permanent resident card. None of these IDs can be expired. All must be active.
Credit Union Activation
If your member application is accepted, the next step is to choose the accounts you’d like to open, make your deposits, and activate them. There may be a minimum deposit requirement to open an account and a requirement to have a minimum balance in your savings account to guarantee a specific rate.
At the same time, review the terms of your membership, including fee schedules, overdraft protection, and any explanations on how dividends and interest are given out. After reviewing everything and your active accounts, you’re set!
