FINANCIAL INSTITUTIONS IN CANADA

MEL 3E

There are 3 types of financial institutions available for Canadians:

Banks Trust Companies Credit Unions

BMO, CIBC, TD, Scotia, Tangerine, PC,…

BANKS

Banks

Collect money through deposits and lend money through loans

Offer a wide variety of services to individuals and business owners

There are federal rules banks must follow

Banks

Usually, banks are large, federal or international corporations

Because of this, they can usually offer better interest rates

Banks are businesses – the profits go to the shareholders, not the customers

Fiduciary Trust, Canada Trust, Canadian Western Trust,…

TRUST COMPANIES

Trust Companies

Trust companies are not very common in this area

Collect money through deposits, lend money through loans, but cannot lend to businesses unless they meet specific criteria

Can act as a trustee – in charge of someone’s account

Trust Companies

Offer a variety of services, usually to a specific group (often the rich)

Can follow federal or provincial rules, depending on the location

Trust Companies

Smaller than banks

Because of this, their interest rates are usually not as good as banks

Kawartha Credit Union, London Firefighters’ Credit Union, Finnish Credit Union,…

CREDIT UNIONS

Credit Unions

Set up for a specific group of people – usually based on location, ethnic background or employer / occupation

Deposit-taking financial institutions that offer many other services

Often able to do small loans, but not large ones

Credit Unions

Follow provincial rules

Owned by the members – profits go back to them

Small institutions, interest rates are often not as good as banks