Mr. Thrifty puts his staff hard to work to find little-known deals, just for his loyal followers. We first mentioned DUCA, a little-known Toronto-based credit union, in 2019. DUCA is another example of a smaller player putting some of the big banks to shame by offering you a good deal for your hard-earned savings.
Thrifty readers who paid attention to our article have had the opportunity to take advantage of some of the best savings rates available in Canada. Other personal finance sites have been slow to cover DUCA, perhaps because many pump up only banks that are paying them commissions to steer you into their products.
Not Mr. Thrifty.
Of course, while Mr. Thrifty wants you to earn more interest on your savings, he also wants you to be confident in placing your money with non-traditional financial institutions.
While not new, DUCA, a Toronto-based credit union, is still rather unknown. In 2019, they gained a lot of attention for offering a special 3% rate on savings accounts for new members until January 2020. Although that promo ended, DUCA has since launched a number of promotional offers. We track their best promos in our guide to high interest savings accounts.
Should you look into DUCA? Mr. Thrifty answers the important questions below.
What is DUCA?
DUCA is a credit union based in Southern Ontario, with its headquarters in Toronto. It was founded by Dutch immigrants in 1954 under the name of “Dutch Canadian Toronto Credit Union Ltd.” and currently has 16 branches across Southern Ontario, with over 70,000 members. Its legal name is now simply DUCA Credit Union Ltd.
For a Canadian financial institution, DUCA is tiny but growing rapidly. DUCA reported $2.9 billion in deposits at the end of 2019, a growth of 17% over the prior year. They have been aggressively courting consumer deposits by offering some of the highest savings rates in Canada, usually through promotional offers which last substantially longer than most other competitors.
Why open an account with DUCA?
While the Bank of Canada has reduced its target interest rate to near zero, DUCA is offering one of the highest interest rates on savings accounts in Canada with their Earn More Savings Account (EMSA) promotion, which they set at 1.50% until January 31, 2022.
The current rate of 0.05% (as of September 18, 2021) is less than competitive for HISAs.
DUCA’s current promotional offer is unlikely to remain available for much longer — it can be pulled at any time. Nonetheless, if miss out, you should monitor DUCA for any promotions they might offer in future. Mr. Thrifty will keep his eyes open for you.
Below, we delve deeper into DUCA to see if it might be the right financial institution for you.
Is it convenient to deal with DUCA?
Although DUCA’s branch footprint is quite small, the importance of physical branches is declining as the Canadian banking system modernizes.
For basic account services, you can make use of their online banking services for payments, transfers, and account enquiries.
For ATM service (cash withdrawals), your DUCA account can be accessed through any ATM which is part of Interac®, THE EXCHANGE, Accel, or CIRRUS®.
However, if you need special services such as bank drafts, those would require a visit to one of their branches and most Canadians (even Ontarians) would be out of luck, as DUCA only has 16 branches concentrated in Toronto / Southern Ontario.
For this reason, Mr. Thrifty thinks DUCA works best as a savings account that earns you higher interest than the big banks.
Is DUCA covered under CDIC?
No. DUCA is registered as a credit union under the Ontario Credit Unions and Caisses Populaires Act and is regulated by the Financial Services Regulatory Authority of Ontario (FSRA).
FSRA (successor to the Deposit Insurance Corporation of Ontario) insures individual deposits up to $250,000 (unlimited for deposits in registered plans). The definition of “deposits” includes not only bank accounts but also term deposits and GICs, registered plans like RRSPs and RRIFs, and TFSAs. See the full list here. Note that foreign currency deposits are not eligible for FSRA insurance.
Read more about deposit insurance in Mr. Thrifty’s Primer on Deposit Insurance.
Is it safe to open a deposit account at DUCA?
If your cash assets exceed the FSRA limit of $250,000, Mr. Thrifty would first like to congratulate you on your financial acumen, but then admonish you for not putting your cash assets to better use.
If you have more than $250,000 in cash to deposit, you cannot get around this limit by simply opening another account at DUCA. The FSRA insurance is applied per depositor, not per deposit.
So if you want to deal with DUCA and have more than $250,000 to deposit with them, you’ll need to take a closer look at the company’s finances. Their financial reports are available on their website here.
In Mr. Thrifty’s opinion, while DUCA is small, it has been very stable and well managed. The company reported a Risk-Weighted Capital Ratio of 16.5% at the end of 2019, well in excess of FSRA’s minimum of 8% and DUCA’s own internal guidance (10.5%).
DUCA also appears to be managing its liquidity well. DUCA’s Liquidity Coverage Ratio, which aims to measure how much high quality, liquid assets DUCA has on hand to meet liquidity needs over a 30 day stress test period, was at 223% as at December 31, 2019 (compared to a regulatory minimum of 100%).
How is DUCA Responding to the COVID-19 Pandemic?
DUCA has a special page on its website, dedicated to explaining how it is responding, operationally and financially, to help its employees and members through the COVID-19 induced economic downturn.
It has operationalized an Emergency Response Team and implemented its pre-established Business Resilience Plan and it has given a transparent accounting of its strong liquidity and capital position.
How do I open an account at DUCA?
In addition to the standard information (Social Insurance Number, contact details, marital status, employer), they require a copy of a cheque from a Canadian bank made out to your name. Have this information at hand and click here to open an EMSA account .
Will DUCA open an account for me if I don’t already have a Canadian chequing account?
This question wasn’t covered under the DUCA website and Mr. Thrifty sent them an email to test their responsiveness. We’re happy to report that they answered within a matter of hours.
And the answer is, unfortunately, no. If you don’t have a Canadian chequing account, the only other option for opening an account at DUCA would be to visit one of their branches personally.
Any other questions about DUCA?
We’d love to add to this FAQ about DUCA, so please let us know if we missed anything. You can send your comments via our Ask Mr. Thrifty page.
More Mr. Thrifty content about DUCA Credit Union
Ask Mr. Thrifty: Is the DUCA 4.25% Investment Share Offering a Good Deal?
Your Guide to High Interest Savings Accounts: Free money is a click away !
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