Big Bank or Credit Union? Which is best in Canada?
One of the most frequently asked questions I receive is about banking. Which bank is best, what are my recommendations, and are some banks better than others?
This is an immensely difficult question to answer - there are a variety of reasons when it comes to picking a banking partner. Just like picking a bank for your personal banking, whomever you choose for your business needs to be closely aligned with you.
Now, there are pros and cons to going with Big Banks (lovingly referred to as the Big 5) just like there are with Credit Unions.
Let’s start with the Big 5:
Pros
Accessible in practically every region of Canada
Lack of personal customer service
Technologically Advanced
Lack of strong community ties
Able to support multi-currency
Currency rates may not be competitive
Cons
Funding available
Funding can require stricter requirements
Offers free banking (or nearly free) for Small Business
High fees on wire transfers
For Credit Unions:
Pros
Strong Community Connection
Flexible Funding Available
Friendly customer support
Networking available to Business Owners
Values
Cons
Monthly fees
Multi-currency can be a little difficult
Wire Transfers challenging
Not accessible everywhere
Other Alternatives
With this in mind, there are some alternatives that you can pair with your bank of choice. For example, Wise is a bank that is used by many of our clients who have multi-currency clients. Tangerine or Simplii Bank can also be used depending on your banking needs (They are partnered with Big 5 Banks).
You may be wondering - which Bank does Signal work with for our banking needs? Well, we bank with BMO primarily due to the practicalities of moving around the country every few years. I haven’t had any major issues with them in the 4 years I’ve been with them.
Other Big 5 Banks that I suggest include RBC and CIBC. Otherwise, Vancity Credit Union on the West Coast is a great option and they have many community initiatives that they do that align with my values (and those of my clients). I’m still learning about other Credit Unions and their specific values.
If you have any specific questions about banking, payment services, or bookkeeping for Canadians, feel free to book a free consult call!