Differences between online banking vs credit unions
February 8th, 2020
This is a general inquiry to learn more about online banking vs. credit unions (in BC, Canada). If you don’t have regional expertise any general information will be helpful.
I basically need help deciding which route to go? Opening an online checking account or going with a local credit union in my area. My biggest deciding factor is fees, and availability of the most bank machines to withdrawal money (with zero fees) as well as direct debit purchasing in retail (again no fees).
If i go with online banking, i am considering PC financial, Tangerine (the Candaian version of ING direct)
https://www.canadiandirectfinancial.com
http://www.tangerine.ca/en
http://www.pcfinancial.ca
I like the idea of online banking because there is less overhead and with PCfinancial points going toward groceries (as it’s a discount grocery store). However there is a lot about credit unions i don’t know perhaps that’s the better route. What are the pros/cons between credit unions and zero-fee online banking given the criteria above.
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From a safety point of view:
1. Banks are federally regulated and your deposits are covered by CDIC (Canada Deposit Insurance Corporation – backed by the Government of Canada) for up to $100,000 in total (you get $100,000 for RSPs and another for non-registered accounts like chequing and savings)
2. Credit Unions are provincially regulated and insurance coverage is ultimately covered by the province.
Most people don’t have to worry about the safety of their deposits in either case.
For online banking, Tangerine is now the Bank of Nova Scotia – ING sold their Canadian operations to them. So dealing with them is just the same as dealing with BNS. PC Financial does not “run” their own system – they are for all intensive purposes a “virtual bank” run through CIBC, so their online systems are just as secure as those of CIBC.
Right now, BNS (Tangerine) has a hard push to attract customers. No fees at any ATM you use (all Canadian bank ATMs) and they are offering sign-up bonuses that include cash and interest rate bonuses.
Credit Unions unfortunately do not have the resources that the big 5 have and really can’t compete with their online services. Where CU’s shine is when you are borrowing money .. many use different criteria based upon “relationship” banking rather than pure “risk rating formulas”.
Which one is best? It all depends on your specific situation, remembering that it also can change over time.
Thanks it sounds like online bank is better for me because i have no interest in borrowing money just zero fee general banking. What’s happening with the ATM exchange network? I heard either PC or Tangerine is dropping out of the exchange network (of Atms), is that true?
Nope – Tangerine is in for the long haul now. Not sure about PC but I doubt it.
As there are no physical branches for either, and they don’t have their own ATMs (except PC in-store), they must use the network otherwise people have no way of getting their $.