Big Four vs Credit Unions, why aren’t Aussies making the switch?

Big Four vs Credit Unions, why aren’t Aussies making the switch?

Monthly data from banking regulator APRA shows a domination of the loans market, in both credit cards and home loans, by the big four banks.

In fact, the total share of all 19 credit unions listed in the APRA August 2019 release when looking at total resident loans and finance leases, is just 5% of the share held by Australia’s first and largest bank, the Commonwealth Bank.

Compare home loans from Australian credit unions:


Home Loan Product

Interest Rate

Comparison rate

Min Deposit*

People's Choice Credit Union

Package Fixed Home Loan (Principal and Interest) (First Home Buyer) 3 Years




Police Credit Union

Better Home Loan




Queensland Country Credit Union

Ratesaver Fixed Rate Home Loan 3 Years




Northern Inland CU

Introductory Home Loan Fixed 3 Years




Summerland Credit Union

Fixed Rate Home Loan 1 Year




Data accurate as at 28th October 2019.

*Lenders Mortgage Insurance (LMI), establishment fees, legal fees, admin fees and other associated costs may apply. Check with the lender to determine the additional charges associated with your loan.

Popular credit unions in Australia

Within the credit union space, People’s Choice Credit Union and Credit Union Australia have the greatest market share, with People’s Choice leading the way in credit card lending.

Regardless of their small share, Roy Morgan research shows that in the 6 months leading up to August 2019, just under 90% of building society and credit union customers declared themselves satisfied with their institutions (89.8%).

Less than 77% of customers of the big four banks said the same (76.7%).

Compare credit cards from Australian credit unions:


Northern Inland CU

People's Choice Credit Union

QLD Country Credit Union


Purchase Rate


for 6 months then 14%


for 6 months then 12.95% or 15.75%



Cash advance rate



for 6 months then 12.95% or 15.75%



Interest Free Days


Up to 62



Annual Fee





for 12 months then $149

Minimum credit limit





Balance Transfer Rate


for 12 months then 14%


for 6 months then 12.95%



for 13 months then 21.74%

Balance Transfer Fee





So, why aren’t consumers switching from the big four banks?

It could be a case of consumer inertia or a lack of financial awareness, but it seems many consumers opt to stay with the big four for convenience, rather than loyalty. An example of this can be seen in the success of the Dollarmites program, estimated to be worth nearly $10billion.

According to consumer group Choice, the program saw 46% of Australians open their first account with the Commonwealth Bank, and of those Australians, 34% still have that first bank account open.

Data accurate as at 31st October 2019. Get the data here

What is the difference between a credit union and a bank?

Whilst banks and credit unions are both recognised as Authorised Deposit-taking Institutions (ADIs) under the law, they do have their differences.

Owned by members

Banks are corporations operating to achieve a profit to benefit their shareholders and therefore have a responsibility to deliver profits back to investors.

Credit unions, on the other hand, are owned by their customers. This means they are able to reinvest in their members and the credit union’s operations, rather than delivering those profits to investors. Credit unions, building societies and mutual banks are all customer-owned, and therefore have a responsibility to their customers first.

According to Roy Morgan research, building societies had the highest customer satisfaction rating as of May 2015 (93.8%), followed by mutual banks (92%) and credit unions (90%).


Credit unions lead the way when it comes to community support and involvement with local projects. Their customer focus ties credit union staff and their members closer together, and allows them to focus on issues that directly impact the communities they support.

People’s Choice Credit Union, for example, are Australia’s first financial institution to be accredited as a White Ribbon Workplace, as they focus on training, policies and support to help break the cycle of domestic violence.

According to their recent Annual Report, they also contributed 4.7% of their pre-tax profit in the last financial year - six times more than the 0.72% average contribution - to corporate community investment.

However, the big banks’ contributions, and their ability to provide larger funding opportunities to communities, cannot be forgotten.

NAB, for example, has provided $250 million in microfinance loans to low income Australians since 2003, and ANZ offers grants up to $15,000 to help regional Australians build vibrant, sustainable communities.

Which bank or credit union is best for you?

The best bank or credit union for you will always depend on your financial situation, the product you are looking for, and the reason why you need a loan in the first place.

Whilst there is no “best” credit union to suit everyone, you can find the best credit union by comparing the following features:

  • Low interest rate: How low is the interest rate of the loan you are applying for?
  • Comparison rate: Check the comparison rate to get a better idea of the total cost
  • Fees: Check if ongoing, establishment, legal and other fees are charged
  • Promotional deals: Do they have any bundles or promotions available?
  • Bonus features: Do they offer offset accounts, redraws or other extras?

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Learn more about bank accounts

How do you set up a bank account online?

Once you’ve compared bank accounts and found the right one, the process of opening a bank account online is quite simple and can be done in around 10 minutes.

To set up a bank account online, you’ll need to prove your identity and provide an approved form of ID as well as your tax file number (TFN).

If you’re a new customer of the bank, you’ll need to verify your identity and potentially upload documents before you can complete your online application.

Once your ID has been verified and you’ve set up your bank account online, you should receive your bank cards in the mail along with your PIN and any other account details.

How can I close a Commonwealth Bank account?

You can close your Commonwealth Bank account at any branch, provided you have appropriate identification. You can also close your account over the phone, by calling 132 221, 24 hours a day.

Can foreigners open bank account in Australia?

If you’re migrating, studying or working in Australia, you’ll be pleased to know that you can open an Australian bank account. For the most part, opening a bank account in Australia is a simple process which starts by comparing the types of bank accounts foreigners can open in Australia.

Once you’ve found a bank account that suits your needs, you can start the application process.

When you apply for the account, you’ll need to provide proof of ID which may include your passport, overseas ID or credit card. You may also need to provide a copy of your visa and proof of address in Australia.

Depending on the bank and the type of account you choose, you may be able to apply for the account online or over the phone before you arrive in Australia.

How do I close my bank account online?

You can usually easily open a bank account online, but you often can’t close it online.

Many banks and credit unions will only let you close an account if you go into a branch or call them on the phone.

However, some banks will let you request to close the account via your internet banking. Check your financial provider’s website for details.

Just remember: If you still have funds in the bank account, transfer them to another account, or withdraw the cash. Also, if you have any payments like direct debits going in or out of the bank account, these will also stop when you close your account.

What do I need to open bank accounts online?

Opening a bank account online is a simple process and only takes between five to 10 minutes to complete. To get started you will need a computer or smartphone with internet access.

Information to have available when you’re ready to apply is:

  • Identification (such as driver’s licence, birth certificate, passport, proof-of-age card)
  • Tax file number
  • Residential address, email and a contact number

In some cases, you might be asked to provide employment details. If you’re not able to verify your identity online, most financial institutions let you provide this in the branch at a later date.

There are some types of bank account that you can apply for only in a branch. However, most bank accounts can be applied for conveniently online.

How do I overdraw my Commonwealth Bank account?

Overdrawing a bank account can happen by accident. It’s often hard to know what your balance is, particularly with direct debits, scheduled repayments and pending transactions competing for cash.

To avoid being stuck with a bank fee every time your account is overdrawn, you can apply for a personal overdraft. This will enable you to overdraw your account up to an approved amount.

A personal overdraft is connected to your CommBank Everyday Account, so you can enjoy easy access to extra funds once approved – anywhere from $100 up to $20,000.

Your overdraft funds can be accessed via your CommBank keycard or Debit MasterCard, or online through NetBank and the CommBank app.

To apply you can either call the Commonwealth Bank directly or visit your local branch.

How do you deposit change into your bank account?

One way to deposit change into your bank account is to visit a branch. Many lenders will also allow you to deposit your change through one of their ATMs.

Can you open a bank account at 16?

Yes, you can open a bank account at 16, or even younger. If you’re 13 or under, you will probably need a parent to accompany you to a branch.

How do you find a bank account number by name?

For privacy reasons, Australian banks won’t hand out account numbers or other details about their customers. However, if you provide a bank with a BSB and account number, they should be able to confirm if those numbers belong to one of their customers.

How do you change your account name on NAB banking?

Changing the name on your NAB bank account is straightforward, as long as you have the right documents.

If you’ve just got married, divorced or legally changed your name, here’s what you need:

  • Married – a marriage certificate
  • Divorced –your ‘decree nisi’
  • Legal name change –your legal name change certificate

You can take either the original document, or a certified copy, into a NAB branch, where it needs to be sighted by a bank employee and a copy taken.

Your NAB bank account name will be updated immediately. New debit, ATM and credit cards with your updated name will also need to be issued. These usually take between five to 10 working days to be posted out to you. Your existing cards will keep working until you activate your new ones.

If you haven’t legally changed your name, but just want to change your account nicknames, you can log onto NAB and do it through the Settings/Mailbox menu.

Can I close a bank account with pending transactions?

You can close a bank account with pending transactions. But after the account is closed, any incoming transactions will be declined by your (old) bank.

The best way to ensure this doesn’t occur is to either wait to close your account until all pending transactions are complete, or contact the creditor and supply them with alternate bank details.

If you’re unsure whether you have any scheduled transactions, you can speak to a banking representative over the phone or via online support.

In most cases, your bank withholds the amount owing for pending transactions (such as online purchases).

Because the pending amount is deducted from your bank balance, you can close your bank account and the purchase will be honoured.

Can you get a payday loan without a bank account?

Yes. Some payday lenders are willing to transfer loans to prepaid debit cards instead of bank accounts.

Can I set up a bank account online?

Most Australia-based lenders will allow you to set up a bank account online. Requirements vary from lender to lender, but you will probably need to provide a passport or birth certificate, as well as a driver’s licence, Medicare card or another form of secondary ID.

How long does it take to open a bank account?

The length of time it takes to open a bank account varies, depending on whether you want to open it online or in person.


Most banks and credit unions have simple online applications that usually take no more than 10 minutes to fill out. It can be especially fast if you have your identification documents like your driver’s licence and passport handy. Sometimes you will instantly be approved and the bank account opened. However, depending on the financial institution, it may take a day or so to be processed and your account number issued. Your account information and ATM or debit card will then be mailed to you, which usually takes between five to 10 days.

In person

If you decide to go into a branch or office to open a bank account, it may take about half an hour. Make sure you bring your identification documents with you. Also book an appointment if you can, otherwise you might be forced to wait in line. Sometimes your ATM or debit card will be issued on the spot, otherwise you’ll need to wait for one to arrive by mail, which usually takes between five to 10 days.