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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Fact Checked -

This article was reviewed by Personal Finance Editor Mark Bristow before it was published as part of RateCity's Fact Check process.



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Learn more about bank accounts

Can foreigners open bank accounts in Australia?

Many Australian lenders allow foreigners to open bank accounts in Australia. Often, this can be done before you arrive in the country – with no Australian address required. When you get to Australia, you can pick up your debit card, using your passport as identification.

Are bank accounts frozen when someone dies?

Yes, Australian bank accounts are frozen when someone dies. If you want to close the account of somebody who has died, you might have to provide proof of death and a copy of the will. You might also have to prove your relationship to the deceased person.

If you have a joint bank account with somebody who has died, you will generally be entitled to all the money in the account. Again, you might have to provide proof of death if you want to change the bank account from a joint account to a one-person account.

Can Centrelink access your bank account?

Yes, Centrelink can access your bank account, but only if you give them a reason to. Centrelink uses data-matching software with other federal government agencies to help it crack down on welfare cheats.

This is why it’s important to give true and matching information to all government agencies.

For example, if you report to Centrelink your annual income is $25,000, but at tax time you report your income as $50,000 with the ATO, it’s likely you’ll be ‘red flagged’.

At this point, Centrelink can legally request that your bank hand over your personal bank account details, to review your finances.

In most cases, Centrelink does not have the authority to take money out of your account. You will usually be given written notice to repay the debt.

However, Centrelink can also reduce your benefits until you’ve paid back what you owe. In extreme cases, Centrelink can garnish your wages and assets (including money in your bank account) until your debt is repaid.

Do I need to open a business bank account?

Just because you’re in business doesn’t necessarily mean you need a business bank account. You could be a sole trader not registered for GST, and use your personal bank account for business.

If you do want a business account, there are plenty of benefits attached to business transaction and savings accounts, as well as business term deposits.

There are business bank accounts designed for businesses with a high volume of transactions, and those for start-ups with a small amount of trade. You could also include an EFTPOS service with your account.

Some business bank accounts charge for the number of transactions per month, while others offer a pay-as-you-go fee structure, where you only pay fees for transactions you make.

It’s up to you whether your priority is mainly transactions, or earning the maximum amount of interest on your principal. There’s a business banking solution for you if you need one.

Can I open a bank account in another country?

Despite having a bad rap for facilitating tax evasion, it is possible and legal to open a bank account in another country, also known as an ‘offshore account’.

Some people choose to open a bank account in another country to invest overseas, for higher interest-earning potential or to access foreign banking services.

The process for opening an offshore bank account differs depending on the financial institution and country in which you’re opening the account.

Typically, you will need to provide identification such as a passport, a local bank statement and a signed declaration proving the source of the money being used to open your account. Usually, deposits into offshore accounts can be made by international money transfer.

Can I link a bank account to Paypal?

Paypal is a safe and convenient way to pay online without the need to share your financial details. You can send and receive money or accept credit and debit cards as a seller using Paypal.

It’s easy to link your bank account to a Paypal account and start making transactions within minutes.

To start, you first need a Paypal account (it’s free to join). When setting up your Paypal account, you will be prompted to link a credit card or bank account (or both if you wish).

PayPal works without a balance; you can use Paypal to shop or send money when your balance is zero.

When your Paypal balance is zero, Paypal will ask you to choose your preferred payment method at the checkout.

This could be either your linked bank account or credit card. Your bank details can be updated if you change banks or credit cards.

Can a debt collector garnish my bank account?

A debt collector can garnish your bank account, but only with a court order. This drastic action is usually taken only if you’ve ignored several notices asking you to pay the debt.

If this happens, there is nothing you can do to stop it other than immediately pay back your what you owe in full or make arrangements to pay it off in installments.

Once a garnishee order is issued, your bank will put a freeze on your account as it processes the order. This usually takes two to three days and you won’t be able to access any of your money during this time.

If you have Centrelink payments, they may be protected, depending on what the court order says.

Can I start a bank account online?

Yes, most lenders that operate in Australia will let you set up a bank account online. The process is usually simple and takes five to 10 minutes. 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 identification. Requirements differ from lender to lender, so some institutions might ask for more or different forms of ID.

Can I close my bank account over the phone?

In most cases, you can close a personal or business bank account over the phone. In fact, this is the best way to ensure you’ve closed an account properly.

By speaking to a banking representative, you can capture and close out any pending transactions, or interest owing/payable on the account being closed.

In the instance where the account is a joint account, or you have multiple bank accounts you want to close, your bank may send you a form that you need to fill out and return.

Either way, you would be advised over the phone of the steps you need to take. Calling your bank ahead of closing an account is often a smart course of action.

How can I deposit cash into my bank account?

The traditional way to deposit cash into your bank account is to go to a branch and give it to a teller. These days, many banks will allow you to make deposits through an ATM as well.

Do you need a bank account to sell on eBay?

You don’t need a bank account to sell on eBay. But if you don’t have a bank account, you must provide either a credit card or debit card.

Can I open bank accounts for my children?

A common question for new parents is, ‘Can I open a bank account for my child?’

The short answer is yes – as a parent you can open a bank account for your child.

Once you’ve compared your options and found a bank account that suits your needs, the process is relatively simple.

As the bank account is for your child, you’ll need to provide some documentation such as proof of ID, including your tax file number.

You will also need a copy of your child’s birth certificate, and in some cases you may also need to sign a guarantee of indemnity.

Depending on the bank and whether you’re an existing customer, you may be able to open a bank account for your child online. However, you may still need to go into a branch to prove your identity.

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 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.