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

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 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.

What do I need to open a company bank account?

To open a company bank account, you will probably have to provide 100 points of ID, an ABN and an ACN. You will probably have to provide the details of all signatories as well.

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.

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 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.

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 open a bank account for a child?

There are few better ways for a child to learn about money management than through savings. And there’s a plethora of bank accounts designed specifically for young people and children.

A bank account for a child can be opened online, over the phone or in a branch in a few easy steps. The minimum age a child can open a bank account for themselves usually ranges between 12 and 14.

If the child is too young to open the account, you can do it for them as their legal parent or guardian. 

To do this, you would need to be over 18, have an Australian residential address and currently reside in Australia (or have proof of residency).

You would also need to provide:

  • Identification for yourself and the child
  • Your tax file number (TFN) or TFN exemption

Depending on the bank account, you might be able to choose what level of access the child has to their bank account (online and via the phone).

Can debt collectors take money out of your bank account?

Many people find themselves struggling to cope with debt at one time or another. In these cases, a debt collector could contact you to demand payment for a debt, to explain the consequences of you failing to pay a debt, or to organise alternative payment arrangements.

If you’re contacted by a debt collector, you may be wondering what their rights are and whether they can take money out of your bank account.

Creditors cannot access money in your bank account unless a court order (also known as a ‘garnishee order’) is made to allow creditors to recover debt by taking money from your bank account or salary.

If this happens, the creditor can take money out of your bank account unless you pay the debt in full or make an alternative payment arrangement such as paying in instalments through the court.

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 wire money to a bank account?

You can wire money to an Australian bank account either through your own bank or by using a money transfer company such as Western Union or MoneyGram. Either way, you’ll need the other person’s name, BSB number and account number. If you use a money transfer company, you might also need to provide the recipient’s address for large payments.

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.

Can I have a PayPal account without a bank account?

You don’t need a bank account to send or receive money through PayPal. However, you do need a bank account if you want to withdraw money from your PayPal account.

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.