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Choosing a bank or credit union:

Your decision should come down to what bank or credit union best fits your needs. That’s why selecting the right institution for your personal situation is essential.

It’s an important decision and KOFE will help you make it.

KOFE Break!

Before we get started, take this quick quiz to see how much you know about the basics of budgeting. It will help gauge the amount of time you’ll need to take on this section.


Do all banks charge the same amount for fees?

A) Yes. The Federal Government makes all banks charge the same amount.

B) No. Banks don’t charge fees.

C) Yes. All banks charge a flat fee of $100 a year for their services.

D) No. Banks charge different fees that’s why it’s important to shop around.

D) No. Banks charge different fees that’s why it’s important to shop around.

What’s the difference between a bank and a credit union?

A) There is no difference.

B) A credit union is owned and controlled by the people who use its services.

C) Credit unions are run by union representatives that profit from the fees charged. Personal marketability / laziness

D) Banks don’t offer credit.

B) A credit union is owned and controlled by the people who use its services.

Choosing a bank or credit union

Where you keep your money sets the groundwork for how you do your banking. Finding the right bank or credit union is simple: ask yourself a series of questions. The institution that offers the best answers is probably the one for you.

For example: Does the institution offer convenient locations? Are the representatives friendly and knowledgeable? Will its products and services limit your ability to save and invest?

Other questions you should find answers to include:

  • What are the interest rates?
  • What types of fees do they charge – chequing fees, overdraft charges?
  • Do they have ATM machines in convenient locations?
  • What types of investment products do they offer?
  • Is their online banking system simple and efficient?
Choosing a bank or credit union

Your decision should come down to what bank or credit union, best fits your needs. It’s your money, so choose wisely.

The difference between banks and credit unions

Banks and credit unions are alike in many ways but do have some differences. Because credit unions are member-based organizations, they give back to their members in the form of better rates and products. Banks on the otherhand are a for-profit corporation and look to their bottom line to satisfy their investors. Banks can be national and have branches all over the country (as do some larger credit unions) and credit unions tend to have branches in their service areas.

Services offered by banks and credit unions

The services offered by both institutions are virtually the same. They provide chequing and savings accounts, but they go beyond just the basics. Services include:

Money Market Accounts: A money marketing account is nearly the same as a chequing account, but it offers higher interest rates. If you have a large amount of money and don’t want it sitting in a low-interest chequing account, check out this alternative. Find an institution that doesn’t charge monthly fees. Ask about other fees, cheque writing privileges and money transfer options. There may also be a minimum balance requirement.

Electronic banking: This is simply banking through your computer, ATM machines and your phone. Some banks are even replacing tellers with machines at their branches. All you need is the bank’s ATM or debit card and you can do your full banking through this machine.

Savings bonds: These bonds are affordable, safe and simple. Bond amounts vary depending on the type you choose. Ask your banker about the bonds they offer. You can usually buy a bond for as little as $25. They also offer tax benefits. They are exempt from provincial and local taxes, and all federal taxes may be deferred until the bond is cashed out.

Registered Retirement Savings Plan(RRSP): An RRSP is a smart tool for retirement savings. You put money toward these accounts and that money is placed in investment vehicles such as mutual funds and bonds. You can even choose the investments in self-directed RRSPs. Any income you earn in the RRSP is usually exempt from tax as long as the funds remain in the plan; you generally have to pay tax when you receive payments from the plan.


A Guaranteed Investment Certificate (GIC): Guaranteed investment certificates are financial instruments that let Canadians invest their money and earn guaranteed interest in the process. With a GIC, you invest your money with a financial institution (the “issuer”) for a specific period of time (the “term”), and they will guarantee you a return of the principal (the initial amount you invested) and interest at a specified rate.

Services vary at institutions, so you must carefully investigate what they offer.

Balancing a chequebook

When you get your chequebook, you will also receive a register. The register is where you record all your transactions each day. Don’t wait for your monthly statements and then record your transactions. That leads to costly errors.

The register usually contains six columns. They include:

  1. Number: The cheque number.
  2. Date: The date the transaction occurred.
  3. Description of transaction: The company, person or place of business you wrote the cheque to or made an ATM withdrawal or used a debit card.
  4. Debit: The exact amount of the cheque, withdrawal or debit payment.
  5. Credit: The column where you record all deposits in the account, including paycheques, gifts, or money you transferred from another account.
  6. Balance: The total amount in your account. You calculate your balance after every withdrawal and deposit. This way you know exactly how much money is in your account.
Balancing a chequebook

Some people track their finances using mobile apps or online chequebook; some use the paper register. You can use a free KOFE worksheet and easily track your finances.

Whatever tracking mode you choose doesn’t matter. What matters is that you always record your transactions. If you don’t, the consequences are usually bounced cheques. Banks frown upon bounced cheques and charge heavy penalty fees for each one.

One other important tip: use a calculator when managing your chequebook. Unless you enjoy doing the math yourself, it’s convenient, quick and usually foolproof – unless you enter the wrong amount. If you’re careful and diligent, tracking your finances becomes a daily part of your life.