What is mutual banking?Mutual banks, also known as customer-owned banks, are financial institutions that are owned by their members instead of owned by shareholders. This is the main difference between mutual banks and other banks, but the rates and fees charged on various products may also vary. Show One member share equals one vote on constitutional matters affecting the customer-owned institution. Profits are reinvested back into the products and services offered by the customer-owned institution, rather than being distributed to shareholders as a dividend. Many types of financial institution fall under the “customer-owned banking” banner:
Customer-owned institutions provide generally the same consumer banking services as listed banks, including credit cards, personal loans, home loans, savings accounts, internet and mobile banking, and term deposits. All credit unions, mutual banks, and building societies are regulated under the Banking Act as Authorised Deposit-Taking Institutions (ADIs), so they are as safe as any other banking institution. Learn more about mutual banks and customer-owned banking here or find out who the mutual banks in Australia are. Canstar compares mutual bankingEvery year, Canstar researches and rates customer-owned institutions for the Customer-Owned Banking Award, rating mutual banks, customer-owned banks, credit unions, and building societies. Canstar compares mutual banks with our own unique and sophisticated methodology, which looks at both product pricing and banking features available from a customer-owned institution. We present the results with our consumer-friendly 5-star concept, with a 5-star rating showing that an institution offers outstanding value for members. Some of the features Canstar compares when rating mutual banks and customer-owned institutions include:
You can read the full star ratings report or compare mutual banks yourself, based on your own requirements, using the comparison selector tool at the top of the page. Mutual Banking Glossary Of TermsPlease note that these are a general explanation of the meaning of terms used in relation to mutual banking. Your provider may use different wording and you should read the terms and conditions of your product carefully to understand what fees and charges may apply. Refer to the product disclosure statement (PDS) from your provider for their definitions of terms. ASIC (Australian Securities and Investments Commission): The Australian government body that regulates mutual banks, customer-owned institutions, banks, and other financial institutions. Bank: A financial institution authorised under the Banking Act 1959 (Cth) to offer a variety of financial products and services. Building society: A type of customer-owned financial institution that provides services similar to a bank, but is owned by its members instead of by shareholders. Learn more about customer-owned banking. Credit union: A type of customer-owned financial institution that provides services similar to a bank, but is owned by its members instead of by shareholders. Learn more about customer-owned banking. Interest: An amount of ‘extra’ money, based on a percentage of the balance in your savings account, which you earn over time by meeting certain savings conditions. Find out the difference in interest rates offered on various products by mutual banks compared to other banks. Internet banking or online banking: Banking that is done via the internet on a computer or mobile device. We research and rate online banking platforms on our website. Mutual bank: A type of customer-owned financial institution that provides services similar to a bank, but is owned by its members instead of by shareholders. Find out the main differences between banks and mutual banks. Mutual fund: A type of managed fund that is contributed by a group of individuals, professionally managed, and invested in a range of securities. Canstar researches and rates managed funds. Ombudsman: Australia has two free and independent dispute resolution service that helps consumers make complaints and resolve disputes with their banks, insurers, and other financial institutions: the Financial Ombudsman Service (FOS) and the Credit and Investments Ombudsman. Private banking: A service
provided by most banking institutions to customers who have more specialised banking requirements than the average customer, such as complex needs related to wealth, business, SMSF, investment, and more. Mutual banks we research and rateAt the time of writing, Canstar researches and rates mutual banking with the following customer-owned institutions:
Compare mutual banks and customer-owned banking institutions for yourself using our latest star ratings. Which bank is best for credit union?Best credit unions. Best overall: Alliant Credit Union (ACU). Best for rewards credit cards: Pentagon Federal Credit Union (PenFed). Best for military members: Navy Federal Credit Union (NFCU). Best for APY: Consumers Credit Union (CCU). Best for low interest credit cards: First Tech Federal Credit Union (FTFCU). Is it good to bank with a credit union?Advantages of credit unions
Credit unions typically provide better savings and lending rates, van Faassen says. NCUA insurance: Federally insured credit unions are backed by the U.S. government. Your money is safe if a credit union fails.
Is it better to put your money in a bank or credit union?Better rates on savings accounts and loans: Credit unions offer higher interest rates on savings accounts and lower rates on loans—exactly what consumers want. Higher interest rates on bank accounts help your money grow faster, while lower rates on loans make it cheaper to borrow money.
Should I switch from a credit union to a bank?Choosing between the two involves some trade-offs. On average, credit unions tend to offer higher interest rates on deposits and lower rates on loans. Banks often adopt new technology and tools more quickly, especially online banks, which are typically able to offer higher-than-average interest rates.
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Which credit union is best to bank with?
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