What are they? |
Financial institutions that are owned by shareholders |
Financial institutions that are owned by customers |
Their banking services are 100% online |
Does the same functions as a normal bank except taking deposits |
Can they take deposits? |
Yes |
Yes |
Yes |
No |
Services offered |
Savings accounts, checking accounts, home loans, car loans, personal loans, credit cards, etc. |
Savings accounts, checking accounts, home loans, car loans, personal loans, credit cards, etc. |
Savings accounts, checking accounts, home loans, car loans, personal loans, credit cards, etc. |
Home loans, car loans, personal loans, credit cards, etc. |
Prices and fees |
Might not be as competitive as smaller lenders |
Members enjoy discounts and lower fees |
Savings on overhead are passed on to customers in terms of lower fees and competitive interest rates |
Competitive interest rates compared with the big banks. |
Customer service |
Tend to have poor service and a history of playing games with borrowers interest rates after they get the loan |
Good customer service |
Exceptional customer experience |
Usually have much better service than big banks |
Lending policy |
There are some policy niches, but it varies among banks |
Their policies offer benefits and discounts for members |
Their approval criteria can be strict |
They have lenient lending policies, but interest rates can be high. |
Who is it best for? |
Better for loans less than $2 million due to negotiated pricing |
Great if you’re a member of the bank |
Great if you’re borrowing up to 80% of the property value |
Great for borrowers with unique needs and those who fall outside of bank policy |
Branches |
Big banks have multiple branches |
Their branches could be limited to one or two states |
No branches, as their services are 100% digital |
Fewer branches than big banks |
Examples |
ANZ, CBA, NAB, Westpac, St. George |
Teachers Mutual Bank |
86 400, Volt |
Pepper Money, Liberty |