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Money Advice for Life
Why I made the switch to a credit union
Not happy with your bank, but scared to make the switch? Read the experiences of one of our members who recently switched financial institutions after realizing her bank was not helping her to achieve her financial goals.
My financial institution was determined at a young age and like most, who I banked with was the same as my parents. As I got older, my banking needs changed yet I continued to bank with the same financial institution. Was my inherited bank actually doing what I needed it to though?
I started to realize how important this decision was. As I’m trusting an institution with my hard earned money, it shouldn’t be about staying with the bank that was chosen for me but instead being sure that who I was banking with was an institution that met my financial needs. That’s when I began to understand what type of bank I needed for me, and if I needed to make a change.
What I took into consideration
Is my bank listening to me and addressing the financial needs that benefit me – not my bank?
What are my financial goals and how is my bank helping me to achieve these?
Does my banks’ values align with my personal values?
How is my bank contributing to my local community?
I soon came to realize that I didn’t have a relationship with my bank. My account was very transactional but the bank never made me feel like I was anything but a number. I did some research about other financial institutions and through this research, I discovered a few key differences between credit unions and banks.
Here’s what I learned.
Credit unions are member-owned while banks are owned by its shareholders. What this means is you have a say on how your credit union operates while banks answer to its shareholders.
Credit union profits go back to their members such as offering No-Fee Chequing Accounts. They also invest their profits back into the local community. Bank profits are paid to their shareholders and your local community rarely benefits.
Credit unions are driven by their members. They take the time to listen, ask questions and help you achieve your financial goals. You are their number one priority.
Credit unions have a one team model approach and are all part of the Ding Free network, allowing members to access a number of ATMs across Canada for free. With banks, you can only use their products and services and you will be charged for using other banks’ resources.
Overall, the biggest thing I learned was that credit unions and banks offer similar products and services. The way they operate though and treat their members are different. To learn more about the differences between credit unions and banks, I recommend checking out Credit unions vs banks: What’s the difference?
After considering what my current bank offers and evaluating the difference between credit unions and banks, I wondered why I hadn’t started looking into this earlier. Why hadn’t I made the switch – by switching to a credit union, I’d be able to save $185 each year just in bank fee savings – so what was holding me back?
Time! I didn’t want to spend a lot of time having to switch all my payments over or learning a new bank’s products such as mobile and online banking.
Was it really worth the effort to make the switch? How much work was involved?
What if I missed payments due to the switch resulting in added interest or cancelled services.
Would I have to give up my credit card? I liked the credit card that I had at my other bank and didn’t want to cancel it.
I started to realize that most of my “fears” were excuses and if I really wanted to take control of my finances I needed to take the time to invest in myself. Ultimately, I liked how a credit union was local and I felt that their values aligned to my personal values. I decided to reach out to Conexus Credit Union, and after speaking with a financial advisor I soon realized they really did care about my overall financial well-being and knew that it was time to make the break up with my current bank and make the switch.
Making the switch
Switching over to Conexus was quite easy, especially with their tool called Click Switch. It allowed me to switch over all of my payments within a few minutes and just the click of a few buttons. My fear of time quickly disappeared.
If you’re like me and some of your fears include missing a payment due to switching or losing a credit card you love, consider some of the tips below before making the switch.
Do not close your current bank account until all of your payments are switched over. Keep the account open for a few months to ensure you haven’t missed anything.
Leave a small amount of money in your old account to cover any payments you may have missed switching over to avoid non-sufficient funds.
You don’t have to switch everything over at once. It’s perfectly fine to keep your loans or mortgages with your old bank until they expire or are paid off.
You can keep your current credit card if you’re not wanting to depart from it quite yet. Check to see if you can link your credit card from another bank to your new credit union account. This will allow you to still view your credit card balance in your new account and help you manage your finances in one spot.
If you are looking at getting a new loan to pay out a previous loan at your bank, make sure you get all of your approvals and payout amounts first before closing out your account or changing your direct deposit.
In the end, I made the decision to move to a credit union because I believed in their values as an organization. I felt it was easier to have an open and trusting conversation and it saved me money on bank fees. Ultimately, when determining your financial institution consider how your financial institution can impact your overall financial well-being. For me, choosing a credit union was the perfect fit.