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What kinds of financial institutions are there?
There are different types of financial institutions, such as banks, trust companies and credit unions.
All financial institutions provide free information about their services, including account types and features, and debit and credit cards. Just walk into or call any bank and ask about their services.
Most financial institutions charge fees for their services and pay interest on the funds they hold. It's always a good idea to compare prices before making a decision.
Banks collect money through deposits their clients make. Then they lend money to borrowers through loans. Banks have a variety of services for individuals and business owners. Banks in Canada are federally regulated.
Credit unions and caisses populaires are deposit-taking financial institutions that also provide many products and services. Credit unions operate under provincial legislation and regulations. Unlike banks, they are member-owned. Members are usually groups of people organized on the basis of profession, place of employment, geographic community, religion or cultural background.
Trust companies also are deposit-taking institutions and, like banks, offer many products and services, such as mortgages, chequing accounts and loans, as well as investments. Unlike banks, credit unions and caisses populaires, trust companies can act as 'trustees' - someone who manages assets of other people and organizations. For instance, a parent opens a trust account for a child saving funds for education, or an estate opens a trust account for managing its assets. All loan and trust corporations must be federally incorporated in order to register to conduct business in Ontario.
For More Information
- Account Selector Tool - Ask yourself these questions before choosing an account. From the Financial Consumer Agency of Canada.
- Service Fees - Facts about service fees from the Canadian Bankers Association.
- Your Rights and Responsibilities: Accounts - This guide has information about who can open a bank account and what to do if a bank refuses to open an account for you. From the Financial Consumer Agency of Canada.
- Newcomers to Canada - Banking information for newcomers from the Canadian Bankers Association.
November 21, 2022