What is a mutual bank? Your questions answered

There are a different breed of financial providers, called ‘mutual banks’ that are member-owned, community focused and local.

When you think about a ‘bank’, what probably comes to mind is loans, savings, shareholders and profits. However a mutual bank is owned by its members, and is not influenced by outside shareholders. That means that a mutual bank has a vested interest in putting its profits back into its products, services and the local community.

Many mutual banks have been around for decades, and you can get all the same services and products from a mutual bank as you would from a traditional bank, from debit cards and bank accounts, through to home loans and credit cards.

1. Is your money secure with a mutual bank?

A mutual bank is regulated in the same way as a traditional bank. So any mutual bank should be registered as an Authorised Deposit-Taking Institution, which means deposits up to $250,000 per customer are covered by the Australian Government Guarantee Scheme. 

Like traditional banks, they’re regulated by the Australian Prudential Regulation Authority (APRA) and all the same rules and regulations apply.

2. What do mutual banks do for the community?

Many mutual banks and credit unions were founded by community or worker groups, and continue to support these groups decades later. That’s why you’ll find mutual banks that are focussed on certain professional groups, like teachers, firefighters or university students.  

There are different ways that a mutual bank might choose to support the community, including partnering with local businesses and organisations, funding community programs, or scholarships and grants.

3. How do you know a mutual bank is right for you? 

There are a few questions you can ask yourself when choosing a mutual bank:

Does its mission statement align with your values?

A mutual bank’s mission is not just about delivering great value financial products - it’s also about supporting parts of the community. Picking a bank that sticks to the same values as you, lets you feel good about your finances.

Is it a sustainably minded organisation?

Many mutual banks voluntarily abide by regulations and principles around social and ethical responsibility. For example, Teachers Mutual Bank is part of the Global Alliance on Banking on Values (GABV) and supports the UN Sustainable Finance Roadmap for Australia.

Is its reporting transparent?

Last but certainly not least, ask yourself if it was easy to find out all this information. A mutual bank is owned by its members, so as a part-owner, you should have the opportunity to know what’s going on with your money. We report annually on our environment, social and governance (ESG) performance, to keep our members informed.

To find out more about what Teachers Mutual Bank is doing for the global and local community and what our values are, head over to learn more about our sustainability initiatives.