What Is A Building Society & Credit Union?

Building Society Credit Union

If you’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 Australia’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 – that  is, they’re “mutuals”. 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 institution’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 societies’  grounding in customer-based shareholding, contrasting with a bank’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 won’t be for everyone,  but they’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, it’s reassuring  to know that an alternative is available.

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