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