What Is A Building Society & Credit Union?
If youâ€™re choosing a new bank account it could pay to look beyond the big banks and see if a credit union or building society can better serve your needs. More than 4.5 million people are members of Australiaâ€™s 150 credit unions and building societies, many of which provide very competitive products and services.
Is A Building Society Or Credit Union Different From A Bank?
Credit unions and building societies differ from banks as they are owned by their members â€“ that is, theyâ€™re â€śmutualsâ€ť. They are mostly focused on a particular community, such as a town or suburb, workplace or industry, but are linked together by one of the largest automated teller machine (ATM) networks in Australia. Building societies tend to be situated in rural and regional Australia, while credit unions are spread throughout the country. The first building societies began operation in Australia in the 1850s, with credit unions starting in the 1950s.
With every customer being a member and shareholder (and having an equal vote in how the organisation is run), credit unions and building societies (in theory) offer products and services designed to cater more for their members than the institutionâ€™s bottom line. This is often the case, with credit unions and building societies often coming out ahead of banks on many banking product ratings and customer satisfaction reviews.
Is A Credit Union or Building Society Safe And Reliable?
Like banks, credit unions are regulated by the Australian Prudential Regulation Authority (APRA), and building societies are subject to the same regulatory standards as banks. Many people believe that credit unions and building societies are more trustworthy than banks, feeling that they have a more considerate nature towards the consumer. This is partially due to credit unions and building societiesâ€™ grounding in customer-based shareholding, contrasting with a bankâ€™s central goal of maximised business profits (including a plethora of questionable fees).
The main industry body for credit unions and building societies is Abacus Australian Mutuals, which is a joint venture between the Australian Association of Permanent Building Societies (AAPBS), the National Credit Union Association (NCUA), and the Credit Union Industry Association (CUIA).
Is A Credit Union or Building Society Better Than A Bank?
As with choosing any bank account, credit card or financial product it pays to look around and find the best product that suits you. Credit unions and building societies wonâ€™t be for everyone, but theyâ€™re certainly worth checking out, especially given survey ratings and customer satisfaction reviews. You may feel that you are getting a more personalised service at a credit union or building society than you would at one of the large national banks. If this is important to you, itâ€™s reassuring to know that an alternative is available.