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The Co-operative Bank Review

Our review of The Co-operative Bank looks at the pros and cons as well as the current ​Personal Loans, Savings Accounts, Credit Cards, Term Deposits, Mortgages and Everyday Bank Accounts offered

Updated 24 March 2022

A bank that pays out profits to its customers? The Co-operative Bank (previously known as PSIS) has a track record of doing just that. And there's a lot more to like, including leading Tertiary and Kids accounts, low-fee and low-interest credit cards as well as competitive mortgages and personal lending rates. But are there catches? 
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In this guide, we look at the main features and products offered by The Co-operative Bank, covering:
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The Co-operative Bank - What We Like

  1. No early repayment fees for personal loans (including car finance) - this provides borrowers with the option to save interest costs by speeding up their loan repayment.
  2. Profits are redistributed to customers - Since 2012, the bank has distributed around $2m to $2.5m every year (except 2020) to its customers. They have each received between $10 to $700 back, the amount based on the level of investments, and the balance of deposits in their accounts.
  3. Leading Tertiary and Kids bank accounts for deposit rates, free fees and other benefits.
  4. A low fee and low-interest credit card - the 'Fair Rate Credit Card' offers a number of perks, including a 0% balance transfer for 6 months, low-interest rate for unpaid balances and a $20/year annual fee. 
  5. Top-rated banking apps and timely technically responses to queries about app functionality on both app stores.

What We Don't Like

  1. Everyday accounts have fees and offer zero (or very low) interest rates on money deposited; better bank accounts are compared here. 
  2. Early repayment fees, which are common in the mortgage market, are confusingly explained by The Co-operative Bank and need to be simplified.

The Co-operative Bank Products Review

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Personal Loans

The Co-operative Bank offers secured and unsecured personal loans with a number of benefits - affordability and flexibility being two key features. The personal loans offered also cover debt consolidation and vehicle financing. Any New Zealander over 18 can apply to borrow between $3,000 and $50,000. The Co-operative Bank has stated that more than 90% of personal lending is unsecured. 

Personal Loan Rates, Fees and Terms
  1. The current rates range from 6.99% to 19.99% p.a. 
  2. Repayments can be made weekly, fortnightly or monthly. 
  3. Repayment terms range from 6 months to 5 years.
  4. The loan establishment fee is $155 per application, which can be added to the balance of the loan.
  5. Overpayments, including early repayment in full, are penalty-free. This means you can pay off your loan as fast as possible without wasting money on early repayment penalty fees which many other lenders charge as standard practice.

What we like

  • Affordable interest rates, which start as low as 6.99%. What you'll pay (and how much you can borrow) will be determined by The Co-operative Bank's lending team when they assess your credit history, personal circumstances and the amount you wish to borrow.
  • Low application fees - many lenders charge $300 or even more if you take out a personal loan - we see $155 as being reasonable.
  • No early repayments fees - you can repay your balance and not be charged a fee, helping borrowers avoid interest costs if they have the ability to repay.​

What we don't like

  • Very little. The Co-operative Bank offers transparent personal loans that are competitive with other lenders.

​More details: Personal loans
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Mortgages and Home Loans

The Co-operative Bank offers fixed and floating mortgages, as well as revolving credit facilities.

What we like

  • Market competitive interest rates (one and two-year terms, as well as floating) in line with the big five lenders and New Zealand-owned banks.
  • Mortgages for those without a 20% deposit (although an interest rate margin applies). The Co-operative advertises that they offer 10% deposit first-home lending for qualifying applicants. 
  • An affordable $350 loan establishment fee.

What we don't like


More details: Home Loans
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Everyday Accounts and Savings

The Co-operative Bank offers a number of 'Electronic account' options which appeal to different customers. The standard offering has a $5 monthly fee for unlimited electronic transactions (ATM use, EFTPOS/debit card purchase and electric funds transfers). However, the monthly fee doesn't include a debit card - customers will need to order a Mastercard debit card ($7.50 annual fee). No interest is earned on credit balances.

Need an overdraft? The interest rates are nothing to get excited about. 
  • ​There is an overdraft facility available, subject to application and approval.
  • The interest rates are 17.50% p.a (and 22.00% p.a if unarranged), with an overdraft facility fee $3.50 per month and establishment fee of $25.

Other bank accounts include: 
  1. The Tertiary Student Package is well-rated in our Best Student Bank Accounts review and comes with an interest-free overdraft.
  2. The Dollars and Sense account (for 0-12-year-olds) and a Dosh account (for 13-17-year-olds) are the most attractive options in the market as explain in our Best Kids Bank Accounts Review.
  3. Saving accounts - the Step Saver, Prize Draw Saver and Online Account haven't historically offered market-leading interest rates. Current rates can be found here.

Term deposits interest rates are, historically, similar to other banks. Click here for the latest offers.

What we like

  • Leading student and kids bank accounts that outperform the competition by offering generous saving incentives.  
  • 24/7 access via Internet and Mobile Banking.

What we don't

  • The everyday bank account, savings and term deposit investment options offer mid-market interest rates meaning better alternatives can easily be found. Heartland Bank's YouChoose is one example.
  • Overseas spender? The ​Debit Mastercard charges 2.50% for foreign currency conversion commission, which is at the highest percentage for a debit card per our research. It compares unfavourably with the Wise Debit Card, for example, which charges around 0%.
  • Only one credit card is offered (see below), so if you like to have one bank for your credit card and bank account and prefer a rewards, cashback or airline credit card, The Co-operative Bank accounts may not be for you. 

More details:
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Credit Cards

Unlike most banks which offer countless credit cards, The Co-operative Bank offers just one. It will appeal to anyone looking for a low fee, low-interest option. The 'Fair Rate Credit Card' offers a number of perks, including a 0% balance transfer for 6 months and a $20/year annual fee. The interest rate is 12.95% p.a. and the foreign currency conversion fee is 2.50%. 

What we like

What we don't

  • ​The credit card has higher than average Foreign Currency Conversion Fee (2.6% vs the standard 1.40%-2.25% standard range charged by other banks' credit cards). 

More details: Fair Rate Credit Card
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Insurance

The Co-operative Bank also offers a number of insurance products, including: 
  1. Life and Trauma Insurance
  2. Home Insurance
  3. Contents Insurance
  4. Vehicle Insurance
  5. Loan Repayment Insurance
  6. Loan Protection Insurance
  7. Credit Card Repayment Insurance

We have not reviewed the policies in any detail, nor have we obtained quotes and made a comparison to other insurers. If you're interested in Co-operative Bank insurance, we suggest getting a few quotes for your needs using our comparison guides (listed below). Once you have those, comparing the pricing and cover with the equivalent offered by The Co-operative Bank will be easier. Our guides cover:
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Bank experience

The Co-operative Bank operates branches nationwide, although there is an increasing focus on interacting with digital customers. 

The bank’s website is well regarded for online banking, and the apps are very well received by Android users and Apple users. Many of the negative reviews have related to features customers needed help with and didn't represent deficiencies in the app itself.
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About The Co-operative Bank

The Co-operative Bank was, until 2011, known as PSIS and operated as a credit union. In 2011 it became a registered bank and has since grown to around 175,000 customers from around New Zealand. The bank focuses on personal loans, mortgages, everyday accounts, credit cards and term deposits.

The Co-operative Bank is owned by its customers and exists to benefit these customers. It has a history of redistributing profits to its members. Since 2013, the bank has distributed more than $12 million to its customers. They each received between $10 to $600 back, based on the level of investments, and the balance of deposits in their accounts. The remainder of the bank's annual profits have, historically, been reinvested to fund continued growth, and to develop new products and services for its customers.

Reducing fees and paying out profits to members is at the core of the bank's operations. In a recent media release, the bank confirmed it had lowered a number of fees because it "exists for the benefit of its customers".

The Co-operative Bank has its headquarters in Wellington and operates branches nationwide.

Do you think The Co-operative Bank is right for you?

Want to know more or sign up for an account or a loan? Visit your nearest branch or call The Co-operative Bank.
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